Written Answers Nos. 141-149
142. Deputy Michael Moynihan asked the Minister for Public Expenditure and Reform the action he is taking to address the challenges to the delivery of the National Development Plan posed by the increases in the prices of construction materials in the aftermath of the pandemic and as a result of the Russian invasion of Ukraine; and if he will make a statement on the matter. [29638/22]
Amharc ar fhreagraThere have been significant and sustained increases in the prices of a broad range of commonly used materials in the construction sector throughout 2021 in the aftermath of the pandemic. Energy prices also showed marked increases in 2021 and have further escalated in response to the Russian invasion of Ukraine. Both materials and energy represent significant input costs for construction projects and inflation is a risk that contractors have been expected to bear under the public works contracts for a defined period.
These inflationary provisions have operated reasonably effectively over the years since their introduction, albeit in times of relative price stability. However, the price movements experienced on construction materials over the past 12 months have arisen suddenly and with no warning. In response to this challenge, I introduced a series of measures to address the risk posed.
- The OGP issued procurement guidance in November 2021 to assist public bodies in managing the challenges they face concluding ‘live’ tenders.
- With reference to future tenders, the OGP published interim amendments to the provisions in the public works contracts on 7 January 2022. Within certain parameters, these amendments reduce the level of risk of extraordinary materials price inflation that contractors have to bear, while also enabling the Exchequer to obtain cost reductions should exceptional price reductions occur during the course of the works. The measures are designed to encourage confidence in the tender process and to mitigate against the over-provision for price inflation in tender prices. However, they do not cater for fuel/energy price increases or supply chain disruption.
While these changes had been expected to bring greater stability to contracting arrangements on projects whose tenders were received after 18 January 2022, there has been sustained feedback from Government Departments and their Agencies that successful delivery of priority projects included in the NDP is jeopardised by further inflationary pressures associated with the war in Ukraine. Departments have reported specific issues with fuel costs and supply chain disruption, including reduced competition for public works contracts and challenges relating to projects underway during 2021.
Through extensive engagement with industry and public sector stakeholders involved in the delivery of the National Development Plan (NDP) 2021-2030, it is clear that the delivery of many critical public capital projects is being put at risk due to the rapid increases in material and energy prices in recent times. For contractors who tendered for projects prior to the onset of these inflationary pressures, this issue is particularly acute.
In the interest of safeguarding public projects that are already under construction and to mitigate the risks of significant losses being sustained by contractors, on Tuesday 10 May I announced details of the “Inflation Co-operation Framework" for those parties engaged under a public works contract.
The Framework facilitates both parties to engage with one another for the purpose of addressing the impacts of this most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The Framework sets down the approaches and the parameters within which parties to a public works contract may calculate additional costs attributable to material and fuel price fluctuations using price indices published by the Central Statistics Office.
In recognition that neither party is responsible for the global events that have given rise to inflation, it is proposed that the additional inflation costs be apportioned between the parties, with, subject to budgetary constraints, the State bearing up to 70% of the additional inflationary related costs. The Framework applies to payments made from 1 January 2022.
The key provisions of the Inflation Co-operation Framework are:
- It operates from the point at which the parties agree to engage until the project is completed or the parties elect to withdraw by giving notice to the other.
- Given that further inflationary pressures have been building since the beginning of 2022, it provides for the back-payment of a proportion of inflation related costs (on materials and energy) to 1 January 2022 on those contracts which pre-date the introduction of the interim amendments (contracts with a revision date earlier than 7 January 2022).
- The inflation analysis is undertaken using relevant indices published by the Central Statistics Office.
- Going forward, for the duration of the framework, additional inflation costs (for materials and energy) are to be calculated in a similar manner.
- For more recent contracts (i.e. those that commenced under the amended forms of contract), the framework permits the recovery of costs arising from fluctuations in energy prices.
- And finally, for all contracts currently in progress, where it can be shown that a supply chain disruption that has arisen since 01 January 2022 that has led to a delay in completing the project, contractors will not be held liable to pay liquidated damages for the late delivery of the project.
The use of the framework is voluntary, but participation by the parties is strongly encouraged. It represents a pragmatic and proportionate response to the current challenges caused by inflation that are not within either party’s control.
Guidance, workbook templates and forms of agreement have been published by the Office of Government Procurement and are available on the Capital Works Management Framework website: constructionprocurement.gov.ie/. There is a new dedicated page ‘Details of Inflation/ Supply Chain Delay Co-operation Framework ’, which can be accessed directly from the link in the top banner on the website.
The measures available under the Framework strike an important balance between the additional costs incurred by the State to support Contractors engaged on public projects and the State’s ability to deliver the NDP including housing delivery, whilst providing value for money for the taxpayer.
The OGP will be further amending the conditions of the public works contracts so that these measures are incorporated into the contractual framework on a permanent basis.
These amendments will ensure a clear apportionment of the risk associated with inflation to enable contractors to price that risk and ensure that we retain a reasonable degree of budgetary certainty without seeing a reduction in those participating in tenders and over-provision for inflation by those that submit tenders.
144. Deputy Brendan Griffin asked the Minister for Public Expenditure and Reform his future plans in relation to the Blasket Islands; and if he will make a statement on the matter. [31331/22]
Amharc ar fhreagraThe OPW’s involvement with An Blascaod Mór goes back to 1988 with Ionad an Bhlascaoid, (the Blasket Centre) being developed with assistance from the locally based voluntary group, Fondúíreacht an Bhlascaoid in 1992/3. The Centre was officially opened to public in April 1994 and the centre plays a critical role in the cultural life of Dún Chaoin and is an important facility for the local community. It is also an important heritage visitor experience, operated by OPW, which celebrates and interprets the extraordinary literary legacy of the Great Blasket and as such, it makes a significant contribution to the economic and tourism agenda in West Kerry.
At An Blascaod Mór itself, the State purchased the majority of the land holdings in 2009. The OPW has provided a very successful guide service on the island since 2013, highlighting the heritage of the island for visitors. The OPW, with assistance from Fáilte Ireland, has also restored two houses on the island, including the home of the pre-eminent Blasket author, Tomás Ó Criomhthain. Further work is currently underway with a view to the further conservation of the largely abandoned island village.
In 2020, the OPW opened a striking new ‘Viewing Platform’ at the Ionad site in Dún Chaoin, on a clifftop site overlooking the Blasket Sound. This project was funded by Fáilte Ireland and the OPW to create a unique way for visitors to experience the dramatic landscape of West Kerry. It connects with the headland walking routes which provide a safe way for visitors of all ages to enjoy the natural landscape.
As part of this strategic programme of investment with Fáilte Ireland, a project is also underway to refurbish Ionad an Bhlascaoid itself incorporating a completely reimagined interpretive exhibition of world-class standard. The centre will re-open to visitors this month.
The OPW is currently investigating options for the provision of public toilets on the island and have discussed this matter with the landowners. OPW will carry out a survey this summer to ascertain the suitability of potential locations.
Improved landing facilities where boats could embark and disembark passengers directly to the island are under consideration. This is an essential element in the sustainable management of the island from heritage, tourism, safety and environmental perspective. While ferry services are confined to licensed vessels with specific tender permits, it is not currently possible to manage access and visitor numbers to achieve a balance between sustainable tourism access and maintaining the fragile environmental balance of the island.
Kerry County Council have advised that is necessary to secure fresh planning permission for a pier at An Blascaod Mór, given that there have been significant changes in the designated status of the island and in environmental regulations in the period since the original permission was granted to Kerry County Council in 2003. This will necessitate updated environmental and other reports to support such an application, as well as the preparation of a detailed updated design for the project. The OPW continues to engage with the relevant stakeholders to consider the key challenges in undertaking this project.
The conservation and protection of An Blascaod Mór continues to be of great importance to the OPW in order to secure safe access for visitors and to protect the unique landscape of the Island into the future.
145. Deputy James Lawless asked the Minister for Public Expenditure and Reform if he will report on the updated investment projects and programmes tracker; and if he will make a statement on the matter. [30067/22]
Amharc ar fhreagraMy Department published an updated Investment Projects and Programmes Tracker and MyProjectIreland interactive map in May 2022. The tracker provides a composite update on the progress of all major investments that make up Project Ireland 2040. The tracker is drawn from data provided by relevant Government Departments and agencies. It focuses mainly on projects and programmes with costs greater than €20 million. Management and delivery of the projects and programmes are a matter for the Sponsoring Agency and Approving Authority in each case. The latest update of the tracker provides progress updates on over 270 projects and 140 programmes, including almost 100 projects in excess of €50m.
The tracker includes user-friendly dashboards and search functions to aid interpretation of the data. As such the tracker is a key tool in overseeing the progress of Project Ireland 2040, aiding industry by communicating opportunities for investment, and alongside the MyProjectIreland map provides an important communications channel for all citizens in relation to Project Ireland 2040 investments taking place throughout the country.
Developed in collaboration with Ordnance Survey Ireland, MyProjectIreland is a citizen-focussed interactive map. By clicking on the map at gov.ie/2040, citizens can find updated information on what has been achieved and what is planned for their own local area. The May 2022 update expands the coverage of the map to incorporate over 1,100 projects.
The Government is committed to continue to detail the delivery of the National Development Plan at regular intervals into the future to allow for full transparency on the implementation of Project Ireland 2040. This will be achieved through regular updates of the capital tracker and map as well as the publication of annual reports and regional reports highlighting Project Ireland 2040 achievements and giving a detailed overview of the public investments which have been made throughout the country.
147. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his plans to address the recruitment and retention crisis across the public sector; and if he will make a statement on the matter. [31315/22]
Amharc ar fhreagraThe subject of overall recruitment and retention in the public service was examined by the Public Service Pay Commission in their first report in May 2017. After a comprehensive investigation, the Commission found that "In general, evidence suggests that there are not significant recruitment difficulties to the various large scale public service vocational streams. However, there are problems in the case of some specific and specialist groups across the public service." Particular challenges were examined by subsequent modules of the Pay Commission and considered by Government.
I would also highlight the growth in public service numbers since the end of 2013. Since 2013, an additional 73,917 public servants have been recruited to meet demands for enhanced public service delivery in front-line services. These include 10,006 teachers, 7,502 Special Needs Assistants, 3,319 Health and Social Care Professionals, 8,572 nurses and 3,835 medical and dentistry staff.
The number of people working in the public service, including staff not directly funded through the Exchequer, stood at 365,893 in full- time equivalent terms (FTEs) at end-2021 according to the most recent data available to my Department. The Revised Estimates Volume included an estimate for end-2022 public service numbers of 384,754 (FTE), an increase of 18,861 FTE (5.15%) over end-2021 actual public service numbers of 365,893.
In the case of recruitment to the civil service, for which I have policy responsibility, the Civil Service 2024 Renewal Action Plan sets out actions to ensure that the civil service is as an employer of choice with a range of initiatives under the Workforce, Workplace and Organisation of the Future themes to help further attract, develop and retain a diverse civil service that delivers for our citizens.
Public service pay has been governed by a system of collective agreements since the Croke Park Agreement was negotiated in 2010 which have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices while minimising industrial unrest.
The current public service agreement is Building Momentum - A New Public Service Agreement 2021-2022. This Agreement, which is due to expire at the end of 2022, is weighted towards those at lower incomes with headline increases of approximately 5% for the lowest paid public servants. It also includes the equivalent of a 1% increase in annualised basic salaries to be used as a Sectoral Bargaining Fund. As the Deputy will be aware, exploratory discussions have taken place between the parties to the Agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to the increasing cost in living. These discussions have now moved to formal phase of discussions which are being facilitated by the Workplace Relations Commissions.
While the current inflationary impacts on all workers is acknowledged, the public service is a good employer offering competitive terms and conditions to attract and retain staff including flexible working arrangements, decent pension provision, fair wages that increase over time and secure employment.
148. Deputy Kieran O'Donnell asked the Minister for Public Expenditure and Reform if he will provide an update on the revised criteria and assessment process in place for public works contracts; and if he will make a statement on the matter. [31329/22]
Amharc ar fhreagraThere have been significant and sustained increases in the prices of a broad range of commonly used materials in the construction sector throughout 2021 in the aftermath of the pandemic. Energy prices also showed marked increases in 2021 and have further escalated in response to the Russian invasion of Ukraine. Both materials and energy represent significant input costs for construction projects and inflation is a risk that contractors have been expected to bear under the public works contracts for a defined period.
These inflationary provisions have operated reasonably effectively over the years since their introduction, albeit in times of relative price stability. However, the price movements experienced on construction materials over the past 12 months have arisen suddenly and with no warning. In response to this challenge, I introduced a series of measures to address the risk posed.
- The OGP issued procurement guidance in November 2021 to assist public bodies in managing the challenges they face concluding ‘live’ tenders.
- With reference to future tenders, the OGP published interim amendments to the provisions in the public works contracts on 7 January 2022. Within certain parameters, these amendments reduce the level of risk of extraordinary materials price inflation that contractors have to bear, while also enabling the Exchequer to obtain cost reductions should exceptional price reductions occur during the course of the works. The measures are designed to encourage confidence in the tender process and to mitigate against the over-provision for price inflation in tender prices. However, they do not cater for fuel/energy price increases or supply chain disruption.
While these changes had been expected to bring greater stability to contracting arrangements on projects whose tenders were received after 18 January 2022, there has been sustained feedback from Government Departments and their Agencies that successful delivery of priority projects included in the NDP is jeopardised by further inflationary pressures associated with the war in Ukraine. Departments have reported specific issues with fuel costs and supply chain disruption, including reduced competition for public works contracts and challenges relating to projects underway during 2021.
Through extensive engagement with industry and public sector stakeholders involved in the delivery of the National Development Plan (NDP) 2021-2030, it is clear that the delivery of many critical public capital projects is being put at risk due to the rapid increases in material and energy prices in recent times. For contractors who tendered for projects prior to the onset of these inflationary pressures, this issue is particularly acute.
In the interest of safeguarding public projects that are already under construction and to mitigate the risks of significant losses being sustained by contractors, on Tuesday 10 May I announced details of the “Inflation Co-operation Framework" for those parties engaged under a public works contract.
The Framework facilitates both parties to engage with one another for the purpose of addressing the impacts of this most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The Framework sets down the approaches and the parameters within which parties to a public works contract may calculate additional costs attributable to material and fuel price fluctuations using price indices published by the Central Statistics Office.
In recognition that neither party is responsible for the global events that have given rise to inflation, it is proposed that the additional inflation costs be apportioned between the parties, with, subject to budgetary constraints, the State bearing up to 70% of the additional inflationary related costs. The Framework applies to payments made from 1 January 2022.
The key provisions of the Inflation Co-operation Framework are:
- It operates from the point at which the parties agree to engage until the project is completed or the parties elect to withdraw by giving notice to the other.
- Given that further inflationary pressures have been building since the beginning of 2022, it provides for the back-payment of a proportion of inflation related costs (on materials and energy) to 1 January 2022 on those contracts which pre-date the introduction of the interim amendments (contracts with a revision date earlier than 7 January 2022).
- The inflation analysis is undertaken using relevant indices published by the Central Statistics Office.
- Going forward, for the duration of the framework, additional inflation costs (for materials and energy) are to be calculated in a similar manner.
- For more recent contracts (i.e. those that commenced under the amended forms of contract), the framework permits the recovery of costs arising from fluctuations in energy prices.
- And finally, for all contracts currently in progress, where it can be shown that a supply chain disruption that has arisen since 01 January 2022 that has led to a delay in completing the project, contractors will not be held liable to pay liquidated damages for the late delivery of the project.
The use of the framework is voluntary, but participation by the parties is strongly encouraged. It represents a pragmatic and proportionate response to the current challenges caused by inflation that are not within either party’s control.
Guidance, workbook templates and forms of agreement have been published by the Office of Government Procurement and are available on the Capital Works Management Framework website: constructionprocurement.gov.ie/. There is a new dedicated page ‘Details of Inflation/ Supply Chain Delay Co-operation Framework ’, which can be accessed directly from the link in the top banner on the website.
The measures available under the Framework strike an important balance between the additional costs incurred by the State to support Contractors engaged on public projects and the State’s ability to deliver the NDP including housing delivery, whilst providing value for money for the taxpayer.
The OGP will be further amending the conditions of the public works contracts so that these measures are incorporated into the contractual framework on a permanent basis.
These amendments will ensure a clear apportionment of the risk associated with inflation to enable contractors to price that risk and ensure that we retain a reasonable degree of budgetary certainty without seeing a reduction in those participating in tenders and over-provision for inflation by those that submit tenders.
149. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform if he will provide a complete list of all buildings that are being leased for use as public buildings; the rents that are being paid on these; and if he will make a statement on the matter. [31321/22]
Amharc ar fhreagraA key function of the Office of Public Works (OPW) is to provide accommodation for all Government Departments. In this regard, OPW holds a portfolio of property throughout the country to meet the various operational needs of the Civil Service, the Gardaí and various other State Bodies. The OPW’s objective is to hold, manage and maintain a property portfolio that is aligned to Government delivery needs in terms of size, location, specification, value for money and optimum utilisation. The table below lists the buildings leased by the Office of Public Works for use as public buildings and includes the associated rent per annum for each building. It should be noted that some of the leases are for specified areas within a building rather than the entire building. The OPW is not in a position to provide data on any leased buildings that may be held by other State bodies where those bodies have entered into an agreement directly with a landlord.
By way of further background information, the Deputy will be interested to know that rental expenditure from the OPW vote in 2021 was €103.3m. In addition the OPW recouped almost €15m from State bodies in respect of rent paid on their behalf. The main core of leased buildings are for the purpose of providing office accommodation for the various Government Departments and their Agencies.
At year-end 2021 the Office portfolio comprised of the following:
• 541 buildings• 341 leases in 285 buildings• 256 owned office buildings• Total floor area – 890,489 sq m (9,585,143 sq ft)• 39% Leased - 346,754 sq m (3,732,427 sq ft)• 61% Owned – 543,735 sq m (5,852,715 sq ft)
Blended Working / Office of the Future The pandemic highlighted that the Civil Service as a whole now needs to examine its attitude and approach to the workplace. Traditional, total reliance on building-based work locations/solutions into the future now needs to be actively questioned. Offices are likely to remain an essential place of work but now may be used differently by personnel working a hybrid work arrangement whereby they attend the workplace for part of the week only.In March 2021 the Government published “Making Remote Work - National Remote Work Strategy”. The objective of the Strategy is to ensure that remote working is a permanent feature in the Irishworkplace in a way that maximises economic, social and environmental benefits.Throughout 2021, OPW actively engaged with the Civil Service Management Board to advance a centralised framework on blended working across the Civil Service. This centralised framework forblended working across the Civil Service was published in March 2022. Government Departments are now formalising their own blended working policies in accordance with this centralisedframework.The OPW has been actively engaged with Government Departments and Agencies on how the workplace can be adapted to meeting new operational requirements in the context of hybrid workstrategies. New work arrangements will impact on office accommodation requirements, and will assist in advancing OPW strategies to optimise the accommodation portfolio and consolidate activities over the longer term.
