PAC Meeting | Nov 20, 2014
Deputy John Deasy: That is fair enough. May I ask Mr. Ryan about Waterford courthouse?
Mr. Brendan Ryan (CEO, Courts Service): Yes, of course.
Deputy John Deasy: My understanding is that the tender process is to be completed by March 2015.
Mr. Brendan Ryan: We are down to four companies that have bid for the bundle of seven
courthouses. By May 2015 we will be down to a single company and anticipate that contracts will be signed by October 2015 approximately, with site work to begin straight away. As the Deputy is aware, we are getting the site in Waterford and will have six courtrooms. I have the details to hand-----
Deputy John Deasy: Will Mr. Ryan give me an idea of the date of completion?
Mr. Brendan Ryan: Everything will be completed. All seven projects will start at the same time. To let the Deputy know what they are, they include the courthouses in Drogheda, Waterford, Wexford, Cork, Limerick, Letterkenny and Mullingar. We expect work on all of them to be finished by the start of 2017 approximately.
Deputy John Deasy: In 2017.
Mr. Brendan Ryan: Yes, it is in the interests of the public private partnership, PPP, developer to get things finished earlier. It is like the Newlands Cross project, on which work finished three months early. The developers started to be paid three months earlier; consequently, it is in the interests of the people concerned to finish early.
Deputy John Deasy: Mr. Ryan believes the work will be completed at the start of 2017.
Mr. Brendan Ryan: Yes, in the first few months of 2017.
Deputy John Deasy: It has just changed from the start of 2017 to some time in 2017.
Mr. Brendan Ryan: Yes, it depends on the particular project involved; some of them are small enough. For example, in Drogheda it is a greenfield site as such and the courthouse is small and will go up easily. The Deputy will appreciate that in Waterford there is a lot of conservation work involved. Moreover, it is an extension to an existing building in respect of which there are preservation issues; consequently, it will take a little longer to complete.
I was delighted when the courts bundle was included in the stimulus package announced by the Government couple of years ago. We have 12 projects outstanding. While we have carried out numerous building projects, 12 county towns remain and once these seven projects are completed, only five county town venues will remain to be dealt with. They will all be significant and efficient buildings; consequently, I was delighted when they were included in the stimulus package. I am also delighted that the work has proceeded to this extent. We have handed over the procurement process to the National Development Finance Agency which is working on it.
PAC Meeting | November 20, 2014
Brendan Ryan [CEO, Courts Service]; Joyce Duffy [Principal Officer, Courts Policy Division] called and examined.
Deputy John Deasy: I have some brief questions, the first of which has to do with Circuit Court sittings leading to civil Circuit Court sittings. I understand in the past 24 hours nominations have been made for seven vacancies on the Circuit Court.
Mr. Brendan Ryan: Yes.
Deputy John Deasy: If we take my constituency as an example, this month's proposed sitting of the civil Circuit Court was abandoned at the last minute. As far as Waterford generally is concerned, the last civil Circuit Court sitting was in May and the next one will be March. Can Mr. Ryan tell me how many sittings of the civil Circuit Court have been postponed around the country because of the vacancies that have occurred in the past six weeks? I checked with the Garda, and when it comes to criminal Circuit Court sittings, the opinion of one fairly senior garda was that they had not been disrupted, but can Mr. Ryan tell me how many sittings have been disrupted?
Mr. Brendan Ryan: I do not have that information. I know the Waterford position because I got correspondence from one of the legal practitioners in Waterford about it. The Deputy is correct that the eight vacancies in the Circuit Court have had an impact. The president of the court decides on the sittings and who should sit where and the cases.
Deputy John Deasy: I understand that. I am asking about the sittings nationally.
Mr. Brendan Ryan: I will have to get back to the Deputy.
Deputy John Deasy: Mr. Ryan must have some idea. This is what he deals with every day. Were there other sittings-----
Mr. Brendan Ryan: The Deputy can take it that if there are seven vacancies at the moment there could be-----
Deputy John Deasy: There are 40 Circuit Court judges-----
Mr. Brendan Ryan: No. There are 38 Circuit Court judges.
Deputy John Deasy: -----there or thereabouts.
Mr. Brendan Ryan: One of them is on long-term sick leave. We are working off 30 judges at the moment. The president prioritises criminal matters, and after criminal matters it is family law matters.
Deputy John Deasy: I understand all that. I understand the process. Does Mr. Ryan have no idea of the number of sittings that have been postponed because of the vacancies?
Mr. Brendan Ryan: The representations I have got are about Waterford. I have no doubt there have been other cancellations, but I do not have those figures. It depends on the scheduling of cases in any Circuit Court in Ireland. They are scheduled a year in advance. They are scheduled either for criminal court, the civil court or the family court. If most of those scheduled sittings this month were criminal court, the impact on the civil court would be minimal because the judges are still dealing with criminal matters. If the scheduled sittings were for the civil court, as was the case in Waterford, unfortunately, the president has directed that criminal matters have to take priority because, as the Deputy will appreciate, people may be in custody.
Deputy John Deasy: Mr. Ryan cannot answer that question.
Mr. Brendan Ryan: No, unfortunately, but if the Deputy wishes I can come back to him on it.
Deputy John Deasy: No. I believe the issue will be dealt with now that the nominations have been made. I am trying to find out how this occurred procedurally and make the point to the Department that it should not occur again. We are in an unusual situation with the creation of an entirely different court, but at the same time, these things happen on occasion because of retirements, deaths, promotions and elevations of a kind, and always have done. In this particular case, seven vacancies were created as a result of one retirement, one elevation to the Court of Appeal and the elevation to the High Court of five individuals. The Government promoted judges from the High Court to the Court of Appeal and it promoted judges from the Circuit Court to the High Court, but what it did not do was make new appointments to the Circuit Court or the District Court in their places. That occurred in the past 24 hours, but there was a gap.
Mr. Brendan Ryan: There is a gap.
Deputy John Deasy: There is a gap.
Mr. Brendan Ryan: There was a gap, yes. I am not trying to defend the Department of Justice and Equality or the Government, but this was unprecedented. I have worked in the courts since 1981. This was unprecedented.
Deputy John Deasy: That is fine. I know that; I just said that. Even when it comes to civil Circuit Court issues, they are fairly serious.
Mr. Brendan Ryan: Yes.
Deputy John Deasy: When we talk about criminal Circuit Court issues we are talking about very serious crimes.
Mr. Brendan Ryan: Yes.
Deputy John Deasy: When we talk about civil Circuit Court sittings, those are serious issues.
Mr. Brendan Ryan: Yes.
"If seven principals of primary schools were being promoted from the ranks there would not be vacancies for the positions they left because teachers would be in place..."
Deputy John Deasy: If seven principals of primary schools were being promoted from the ranks there would not be vacancies for the positions they left because teachers would be in place. Yet when it comes to this area, it appears to be acceptable. It is a political process. I know it should not be, and it is something this Government probably has fallen down on when it comes to judicial appointments. In our programme for Government we promised that we would look at this, and I believe it is a failing. People such as Mrs. Justice Susan Denham have commented that it is a miracle our Judiciary has maintained its independence so well considering it is so political.
That aside, what we can do at the very least - I understand this is not Mr. Ryan's role - is to have a reasonable transition when something like this occurs to ensure there are no gaps and that sittings are not postponed.
I know Ms Duffy does not set policy, but she deals with it within the Department of Justice and Equality. I can raise this with the Minister, but it is a simple question. The suggestion I am making and that I will make to the Minister - I am raising it with Mr. Ryan now because he is the person dealing with policy in the Department when it comes to the courts - is that when this occurs, the appointments to the Circuit Court and the District Court should happen at the same time. They should happen in tandem or, at the very least, within a specified period. That is a simple suggestion.
Mr. Ryan makes a good case about the Courts Service's efficiency and talked about a 16% reduction in its staff. Some would state it is too efficient, while plenty of communities nationwide would suggest it has stripped down courthouses and so on. The service has done a good job in cutting costs and, at the very least, it is possible to have sittings take place. While one part of the Government system may be working well, another is not and has failed in providing judges to preside over sittings in the Circuit Court.
This is something that could be rectified easily. I do not know whether the witnesses have a comment to make on this. I again acknowledge to Ms Duffy that I am aware departmental officials do not set policy. I do not know whether this issue has been raised in the past, but it appears to be a reasonable suggestion that when something like this occurs - retirements and deaths take place all the time - this could happen in tandem.
Ms Joyce Duffy: I am certainly happy to take back the Deputy's comments to the Minister who probably will make the point that she has moved speedily to appoint judges and assist in the process of appointing them. In the past four to six weeks she has brought a series of memorandums to the Government on appointing ten judges to the Court of Appeal, the subsequent replacements to the High Court and, this week, on appointments to the Circuit Court. As Mr. Ryan stated, this has been unprecedented.
This is the first new court jurisdiction established since 1961. It has been a long time since we went through such a major change to the system. As for the nominations to the Circuit Court announced by the Government yesterday, the process was completed in as speedy a manner as possible. As the Deputy is aware, names are submitted via the Judicial Appointments Advisory Board which conducts its process. The Government then has its part to play in evaluating the names and considering serving judges for the position. However, I appreciate that there has been a consequence, of which the Minister will certainly be made aware.
Deputy John Deasy: I take Ms Duffy's point. The situation was unusual. I received a reply to a parliamentary question on this matter a few days ago and what has happened in the past couple of days is miraculous, considering that the last line of the reply indicated that the Government would be dealing with the matter in the coming weeks.
What role does Mr. Ryan play when something like this occurs? Obviously, the presidents of the different courts have a major role to play in this regard, but as far as rostering is concerned, the issue about court sittings taking place on Monday afternoons or Fridays has come up repeatedly. Is this something in which the Courts Service gets involved in any way, shape or form?
Mr. Brendan Ryan: No, it is entirely a matter for the presidents of the courts. The Deputy will appreciate that we support sittings as they occur.
Deputy John Deasy: It may be an old jurisprudential cliche, but justice delayed is justice denied. Perhaps Ms Duffy might take the suggestion back to the Minister. While I can raise it directly with her, it is reasonable to avoid such delays because, as Mr. Ryan is aware, practitioners could not believe people had not thought about the gaps that there would be as a result of these appointments or elevations.
Ms Joyce Duffy: Absolutely.
PAC Meeting | Oct 23, 2014
Re: Sudden suspension of Waterford IT and IT Carlow merger discussions
Deputy John Deasy: At the risk of clogging up the work programme I shall raise something else, a matter concerning the Waterford Institute of Technology and Carlow Institute of Technology. Both bodies come under the remit of the committee and have been in here recently.
An abrupt announcement was made a couple of days ago that the amalgamation or merger of the two organisations was ending. A joint application was being worked on by those two bodies with a mind to ultimately putting together a successful application for a technological university in the south east. Similar applications by a number of different educational institutions in Dublin are ongoing.
I have a question for the Comptroller and Auditor General. It is my understanding that when it comes to a restructuring like this one, which has gone on for many years, there is a significant cost for restructuring. Those on the boards of these two organisations have a responsibility to account for the money that has been spent on the process of restructuring which I believe could be reasonably significant. They need to answer for that. The suspension of this amalgamation or merger, as abruptly as it has occurred, needs to be questioned because of the cost that has been incurred by the State over the past few years.
I ask the Comptroller and Auditor General the following. Is it the case that a significant amount of money accrues when it comes to this kind of restructuring? Does the Committee of Public Accounts have a remit to ask both of these organisations to come in here to explain the amounts of money that have been expended and find out why they decided to abruptly end the merger or amalgamation?
Mr. Seamus McCarthy (C&AG): Certainly there is expenditure in regard to restructuring. That is not just a question for Waterford and Carlow because there are other organisational restructurings in the offing. My recommendation to any institute of technology would be to disclose exceptional expenses of that nature in the financial statement. It is the Higher Education Authority that dictates the format of accounts and the type of analysis that is done on expenditure. If there was expenditure incurred it is in the financial statements that have been presented. Therefore, for anything that is an expenditure item, one would certainly be entitled to ask and to try to go behind if the-----
Deputy John Deasy: Mr. McCarthy is saying it should be itemised for the special cost with regard to restructuring.
Mr. Seamus McCarthy: That would be my recommendation because it is exceptional expenditure. Normally, one would expect a restructuring to be on a slightly shorter timescale. In a way, it has become embedded in the institutions because this has been going on for quite some time.
Deputy John Deasy: I think what the Comptroller and Auditor General is saying is that the HEA should also be asked to come in to the committee, if we were to ask WIT and CIT to account for this. Time is of the essence here. I do not want to clog up the work programme any further but there is an imperative to ask these organisations to come in quickly. This has been going on too long. Depending on who one asks, one gets different answers as to why this occurred. It is unacceptable. Representatives of both boards need to be asked now what exactly has happened here.
Chairman (Deputy John McGuinness): In order to be able to focus on this directly, we should write to WIT and CIT and ask them to extract from their accounts over the years the exact amounts of money that were spent in regard to the project so that we get the figures. Otherwise, we will be looking at accounts and the figures will be wrapped up in some other figure for one thing or another. It is likewise with the HEA. We can bring in the three bodies and we will insist on it being done as quickly as possible.
Deputy John Deasy: Will you make it clear to them that the expectation is that they come before the committee in the short term?
Chairman: Yes, and they should bring these figures because we do not want a job of work to dig out the figures. They should have them on hand and we will then know the exact cost over the years since this began of the merger negotiations or discussions, or the project itself.
Deputy John Deasy: I think I speak for a lot of people in the south east, not just in Carlow and Waterford, who, when they look at this situation, view it as being messy. They are tired of it. It has gone on too long. They can reasonably expect a reasonable degree of governance when it comes to these two bodies and this joint application. I am coming to the conclusion that the governance of this application has not been adhered to. We need to get to the bottom of this sooner rather than later.
Chairman: I agree. We will set it up as soon as possible. We will ask for the figures beforehand because we need to see them.
PAC Meeting | Oct 16, 2014
Special Report 82 of the Comptroller and Auditor General: Financial Management and Reporting for Fishery Harbour Centres
Mr. Tom Moran (Secretary General, Department of Agriculture, Food and the Marine) called and examined.
Deputy John Deasy: The witnesses are all very welcome and I wish to focus on a particular harbour, Dunmore East. I will go back 14 years and refer to the studies and reports that were done in conjunction with Mr. Moran's Department and other Departments over that time span. In many cases, Mr. Moran and his officials will have been aware of reports, recommendations and findings but it is useful to go back and list recommendations and findings to show the lack of activity.
In 2000, KPMG drew up a consulting report - a technical and socio-economic review of infrastructural requirements in Dunmore East and the significant need for development of the harbour. This was followed in 2003 by a Kirk McClure Morton report, which was commissioned by the Department then dealing with this - it dealt with preliminary designs and an environmental impact assessment was planned. It was found that the existing harbour was too small and did not permit proper development so the report was, effectively, a reiteration of the previous one. In 2004, a public consultation process commenced and planning permission for the fishery harbour centre was granted in 2005. In 2006, some €300,000 was provided for design and another €300,000 was provided for site investigation. The first phase was to begin in 2008 but then the economy collapsed, as we all know.
In 2007, Poseidon Aquatic Resource Management Limited was commissioned to conduct a cost-benefit analysis and found a number of weaknesses. The harbour was deemed to be very old and in need of a significant upgrade. No significant dredging had taken place for many years at that stage and it is now 22 years since such dredging. Most of the large vessels had to steam to Cork or Howth to dock and there was no safe access to the shore for yachts. These findings are from 2007.
The five-year business plan for Dunmore East was proposed to increase fish landings to 9,100 tonnes and grow harbour dues and revenue to €267,500 by 2013. As the witnesses know, on 20 March 2014 the Department sanctioned maintenance dredging in Dunmore East. Consulting engineers finalised tender documents and a completed tender package was advertised on 24 May. The tender submission stage ended on 7 July 2014 but we have now learned there is a delay. The €4 million involved in this relates only to the dredging of the inner basin - the idea of overall harbour redevelopment is unmentioned. In 2013, some €827,000 was made available and €450,000 of that was to widen and extend the slipway at the west wharf. Some €220,000 was for the extension of the fishery harbour building.
The Chairman spoke of legacy issues and if one goes back over the past 14 years on the Dunmore East issue, there is a legacy of bitter disappointment when it comes to what the Government promised and what it actually delivered, or not delivered. Dredging was announced earlier this year but what is the situation on the tender process? When will dredging commence?
Mr. Tom Moran: I thank the Deputy and the Chairman. Before I answer those questions, I should point out that fish landings at Dunmore East are increasing. Between 2010 and 2013 fish landing increased by 43%, from 8,386 tonnes to 11,994 tonnes, and this is good. I understand the Deputy's point on historical investment levels but between 2006 and 2013 some €5.4 million was invested in Dunmore East. It is a fine harbour but the Deputy is absolutely correct that there is a dredging issue. He is also correct that we intended to spend money on dredging in 2014 and allocated €4 million in the capital programme for that purpose.
We ran into a difficulty with the tender in relation to that on the issue of value for money. My information is that there is an absolute intention to begin that as soon as possible in the new year under next year's capital programme. It is a top priority.
Deputy John Deasy: When can we expect it to begin? Will it be early in the new year?
Mr. Tom Moran: Whenever it is appropriate for dredging to start. We have to re-tender for the work.
Deputy John Deasy: In the first instance, the Department has to re-tender so when is it expected to have the tendering process finished?
Dr. Cecil Beamish: The tenders that were received were deemed after assessment not to be value for money for the State and to involve potential cost exposures for the State to claims. The responsible decision, that everybody here would agree with, was not to expose the State by going with the available tender. Let me outline what is being done. Further sampling and analysis is being done and in greater detail on all the sediments; one of the issues is the level of contamination in some of the sediment areas. We are trying to see if we can more precisely define in the tender documentation the extent of the contamination and the appropriate treatments that would be requirements for different elements of the dredging. In that way, we hope to achieve more cost-efficient tender bids that can be advanced and proceeded with. The work is ongoing on the sampling exercise which will lead to the construction of a different tender specification, with the hope and expectation of getting a better value for money tender proposition.
Deputy John Deasy: When will that work be finished so that one can start the tender process. I need to know when it will happen. It is very important at this point that the people of Dunmore East have some certainty.
Dr. Cecil Beamish (Assistant Secretary General, Dept's Marine Division): The steps are to do the sampling and see the results. We are also testing the possibility of alternate ways of dealing with the contamination, because the technology is moving on as are the systems. When there is engineering advice available on both of those elements, and the sampling surveying has been completed and analysed, then a tender specification will be put together. The tender will be advertised and we will analyse the response. The earlier in the year that this can be done, the easier it will be for a contractor to carry out the works in reasonable weather conditions while also taking account of the times that others use the harbour. The objective is to get a new specification for the tender process as early as possible in the new year so that the contract decision can be made as early as possible.
Deputy John Deasy: Mr. Moran has listed off the amount of money that has been invested into Dunmore East since 2006. I have the figures in front of me for the period 2008 to 2013 and the total in that period was €4.76 million. If I went to the other five ports and fishery harbour centres, I would probably find that the equivalent amount went into them. That is fine. When it came to the slipway in the west wharf, the level of effort and lobbying I had to do to get that money, €450,000, to extend the slipway was incredible. Dunmore East is a neglected port and has been for a long time. There is a litany of reports but no action was taken as a result, which is absolutely incredible.
I am going to chase the officials on this project for as long as it takes to get the dredging done. There comes a point when one cannot answer reasonable questions from a fisherman or a businessman in Dunmore East. It has come to the point that I have become hesitant about giving affirmation to any Government announcement as it affects Dunmore East, which is an unfortunate situation to be put in.
Not so long ago, we were talking about investing €60 million in the harbour and the studies were done.
The business community in Dunmore East is very resilient. The Waterford Institute of Technology has secured funding under the fisheries local area development scheme for feasibility studies of ideas that would stimulate job creation and economic activity in Dunmore East. The deficit has been on the Government side. The people of Dunmore East are trying to keep this village vibrant. There was a meeting last night about all of the issues. The Department has to focus on the infrastructural issues that have been identified ad nauseam for the past 20 years in Dunmore East but have not been acted upon.
I have made the case. It is not a personal criticism, but there is a case to be answered with regard to Dunmore East.
Deputy John Deasy, Public Accounts Committee chairman, John McGuinness TD, and Comptroller & Auditor General Seamus McCarthy prior to this morning’s private meeting with John Muwanga, Auditor General of Uganda, who uncovered a fraud which included €4 million of Irish aid money in 2012. As a result the Irish Aid programme was suspended and the money subsequently repaid in full. The PAC examines the controls on the Overseas Development Aid budget with the Department of Foreign Affairs on an annual basis, with delegations to two programme countries — Mozambique and Ethiopia — having looked at how risks can be mitigated.
PAC Meeting | May 1, 2014
Department of Social Protection
Secretary General, Ms Niamh O'Donoghue, called and examined
Acting Public Accounts Committee Chairman (Deputy John Deasy): Expenditure on pensions totalled €6.3 billion in 2012, which is an increase of 7% on 2009. A further 3% increase was projected for 2013.I would like to shift to something in which the Department is involved intimately, that is, the Waterford Crystal pensions issue. Rather than outline the background, of which Ms O'Donoghue will be aware, perhaps she could outline the Department's involvement in this and the current position when it comes to dealing with those representing the workers. The High Court has set a date in the autumn. Many people, including me, are unhappy about that because this has dragged on a long time but perhaps Ms O'Donoghue can address the current position, the Department's involvement and, broadly, the issue of under funded pension funds in the State. What is of interest to me is how we got to this position, how the massive under funding of the Waterford Crystal pension scheme was allowed to happen, how we will deal with the numerous other under funded pension schemes that are discussed regularly, which probably amount to billions of euro, and how we deal with the governance of these schemes, for example, how the trustees acted and so on. It is a significant issue.
Niamh O'Donoghue: The Waterford Crystal case arose because of a case taken to Europe in the context of what was called a double insolvency where a pension fund was insolvent and the company then became insolvent. Workers, therefore, were caught by a double insolvency and the question arose in respect of the State's liability to protect their pension rights in that instance. The court made findings that the State had an obligation and had failed in its obligation in regard to a particular directive to establish a rate at which such protection could be offered. In terms of how that would be addressed, legislation was passed last year to address the gap that was identified by Europe. The mechanism is now in place in terms of future proofing to ensure there is some protection for workers but, obviously, a number of companies, including Waterford Crystal, are caught in that gap between the directive and last year's legislation. Given that it is the subject of a court case, I cannot comment on it except to say the court case is ongoing but the predominant group is the workers n the Waterford Crystal case. A small number of other schemes are in the same situation with a much smaller number of workers.
Acting Chairman (John Deasy): The Department has made an offer to the group representing the workers. The issue that will be decided by the High Court in the autumn is how much or what percentage of their pension they will get ultimately. The Department is actively engaged with the people who represent them. Am I correct that an offer has been made by the State to provide a particular level of payment?
Niamh O'Donoghue: It would be very inappropriate for me to comment on that.
Acting Chairman (John Deasy): Is the Department in contact with the High Court regarding the setting of dates or is that an independent function of the court?
Niamh O'Donoghue: That is handled by the Attorney General's office.
Acting Chairman (John Deasy): Is Ms O'Donoghue in contact with the Attorney General's office?
Niamh O'Donoghue (below): Yes.
"Some indication needs to be given by Ministers or the Department, although it does not speak for Ministers, with regard to the urgency required. It has been dragged out for too long and there needs to be some resolution regarding this scheme, notwithstanding the massive issue of under-funded pension schemes."
Acting Chairman (John Deasy): Ms O'Donoghue, therefore, liaises with the Attorney General's office regarding its communications with the High Court. Can she understand the difficulty for the workers? I know people who have died since this process began, going back to when the court case was taken to the Europe. It is estimated 30 former workers have died since this was initiated and that is an issue for us. It has gone on too long. There is a huge issue with under funding of pension schemes but-----
Niamh O'Donoghue: It is a huge issue in the State and Ireland is not unique in terms of problems with defined pension schemes and the funding of pension schemes. A number of things have happened. There has been a restructuring of the governance arrangements. The Pensions Authority has been put in place to replace the Pensions Board, which had responsibility in this area for regulating the application of the Pensions Acts. The funding standard has been restored and engagement is going on with all the schemes in respect of their plans to meet that standard over a number of years. It is, therefore, an active space at the moment but it is challenging and difficult. That is not unique in Ireland.
Acting Chairman (John Deasy): Ms O'Donoghue has explained the nexus regarding the Government generally. The Department is in communication with the Attorney General's office and it might be in contact with the office of the President of the High Court. Some indication needs to be given by Ministers or the Department, although it does not speak for Ministers, with regard to the urgency required. It has been dragged out for too long and there needs to be some resolution regarding this scheme, notwithstanding the massive issue of under funded pension schemes. Has the Department examined the governance of the Waterford Crystal pension scheme and how that hole came to be in the first place? Has this been investigated?
Niamh O'Donoghue: The governance and operation of the scheme was subject to the regulation of the Pensions Board.
Acting Chairman (John Deasy): "No" is the answer. The Department is dealing with this perspectively or from this point on.
Niamh O'Donoghue: The Department was actively involved in the court case that led to Europe so very considerable examination was done in regard to that. However, at that point, the company and scheme were insolvent and the workers found themselves in that situation.
PAC Hearing | April 3, 2014
Mr Robert Watt, Secretary General Department of Public Expenditure & Reform, called and examined.
Deputy John Deasy:
First I’m going to ask you about what I regard as the largest, potentially, public-private partnership that this country has seen in many years, and possibly has ever seen. And that is something I know your Department is involved in: that is the Irish Strategic Investment Fund. It’s not listed here in your opening statement or dealt with, but I think it’s something your Department might be leading on with regard to the inter-departmental committee with Finance and the NTMA (National Treasury Management Agency).
As much as I know about this, it’s a €6.8 billion fund which comes from the National Pension Reserve Fund, which is being turned into an Investment Fund, that is looking for commercial investments from the private sector. That €6.8bn hopefully will be matched by another €6-7bn of private money, and the Government’s idea — well, it’s started already — is that it’s being farmed out to private equity funds in Dublin, in London, to look for those commercial investments. And that’s fair enough.
What I am interested in is: has any thought been given to where this money is going to be spent, or is this random with regard to commercial investments coming into the Government; the equity funds taking a look at these and some kind of process within Government — is there any sense, or has any thought been given to parts of this country that frankly are stagnating?
We’ll say, for argument’s sake, there’s some truth to the idea that Dublin, for example, has seen some kind of a recovery. But other parts of the country have not. Surely because this is the largest stimulus fund this country has ever seen, or will see for years, has anybody in Government thought about diverting some of this money, as a critical policy measure, towards those parts of the country that are stagnating, that are regressing in some cases when it comes to unemployment. And that have seen no recovery.
Has any thought been given to that considering the amount of money that’s involved here? Going through your statement, you talked about the PPPs in the past, and I’d make the point to you that many of these PPPs were targeted, they were infrastructural projects, and they would have been strategic projects that were targeted around the country for various reasons — infrastructural reasons. There was a different mindset and thought process involved in targeting that money, those billions, to those different parts of the country.
In this case I have a suspicion that the €6.8bn and the money on top of that, that may come in from the private sector investments, is not targeted around the country at all.
"This is the largest stimulus fund this country has ever seen, or will see for years. Has anybody in Government thought about diverting some of this money, as a critical policy measure, towards those parts of the country that are stagnating?"
Robert Watt: You’re right in terms of the investment fund. It’s €6.8bn. It previously was the NPRF, I suppose a passive investment fund which was global, which invested in property and equities and bonds across the world. The fund is in the NTMA. The Department of Finance has a role, we have a role — we’re not leading: we are part of a group ... we are absolutely involved. The fund is being reoriented towards investment in projects in Ireland that can provide a return, an economic impact, a jobs impact; also that are commercial, that provide a commercial return to fund. And they have to get the balance right between projects that for whatever reason the market won’t fund ... maybe because there’s more uncertainty about the project or because it’s a start-up activity. So it won’t be delivered by the market yet it’s commercial. It’s going to be tricky for them to identify projects.
There is legislation being drafted, a Bill is being prepared. The Minister for Finance, Mr Noonan, will be publishing it I think after Easter, around Easter time, which will set out the mandate: they’ll be obliged to set out an investment strategy, and that investment strategy will have to reflect or listen to the views of Government.
Based on what I’ve seen there’s no regional angle or perspective to this. So their job is to invest in projects that have an economic impact, a jobs impact, and which are commercial. But as far as I’m aware at this stage there’s no regional impact.
John Deasy: And I suppose what I’m asking is, should there be?
Robert Watt: Should there be? Well, this is something to debate. You know, we look at exchequer funding or PPPs [and] we have regard to spread. Naturally, the political world and the way monies are allocated, reflects the spread.
John Deasy: That’s been the case in the past.
Robert Watt: That’s been the case in the past. So, a commercial fund, an investment fund investing in projects, is there a role for it to take account of a regional remit? That there’s regional balance? It’s something that I haven’t thought about. It’s something that could be debated. You know, clearly that there is, based on the evidence that we have, a two-tier economy emerging, that the Greater Dublin area is different — I think all the evidence suggests that it’s out of recession, and growing. You might say, well, that suggests there are greater opportunities elsewhere in parts of the country that haven’t moved as quickly out of recession: for example property values are lower or opportunities might be cheaper. But it’s something that I, Deputy, to be honest, haven’t reflected on. I don’t see any reason why a fund which is being orientated to jobs and economic activity in Ireland, why in theory it can’t have regard to a regional spread or a regional balance.
John Deasy: You know the basic figures with regard to, for example, Foreign Direct Investment: Dublin, Cork, Galway — it’s about 82%. It’s an inordinately huge number when you consider the country as a whole. And the disparity between those three urban areas and the rest of the country is... it’s immense. So here we have something that could amount to €12-13bn, and nobody’s given any thought to any regional aspect at all. And I think it’s a deficit, potentially.
Robert Watt: I may be doing them a disservice but from what I’ve seen, in terms of the legislation, I don’t see that, but that’s not to say...
John Deasy: This has started already. [The Dept of] Finance has given the presentations. He [the Minister] has said we’re open for business, bring it on. As you know, and you’ve been around the financial worlds long enough, equity funds don’t really take into consideration public policy that much. And what we’ve done is, we’ve actually given them the job to find these commercial investments. And I don’t believe that anyone has actually taken into account the fact that we may be looking at not only a two-tier economy, but a two-tier recovery. And that’s what I want to avoid. And that’s what I think this legislation should try to avoid. Now, someone might say to you, if you do that, and if you go down that line, well it makes some sense. But with regard to commercial investments, would you be actually negating, or would you be blocking some decent investments, if you made the case that a lot of that money, or some of that money, be earmarked for the areas that were suffering the worst from the recession. At the very least I think we need to start talking about that.
Robert Watt: My understanding of the legislation is that the Minister for Finance, the Government, would input into the overall strategy, the focus, but obviously the individual decisions are commercial decisions then for the body then, the ISIF set up within the NTMA. So there is a role for public policy and there is a role for Government... as you mentioned it, Deputy, no, I don’t see any reason why you can’t have regard to the regional impact of the investment, have regard to exactly the types of projects and the impact they might have. And that would have to be reflected back in some sort of mandate then to the people who are responsible for making the decisions.
Mount Congreve update from OPW; business proposals for heritage sites; plus the annual cost of flood damage
PAC Meeting | January 30, 2014
Clare McGrath, Chair of Office of Public Works, called and examined.
Deputy John Deasy: While members were in committee last Tuesday night, there was a briefing on Mount Congreve. Can Ms McGrath provide an update in this regard?
Ms Clare McGrath: In respect of Mount Congreve, one of my colleagues who will be present for the discussions on the Vote might be able to provide a more particular update.
John Deasy: Perfect.
Clare McGrath: I can state, regarding the Mount Congreve estate, that the Mount Congreve Foundation has expressed its intent to remain in situ in Waterford and to open to the public the gardens and the estate. As for the involvement of the Office of Public Works, OPW, in this regard, members are aware the Mount Congreve Garden Trust owns the gardens and the house. The State, through the OPW, is one of the trustees. The employees who are working in the gardens are employees of the Mount Congreve Foundation, which has expressed to us its intention to remain in situ and to run the gardens. If the Deputy wishes, I can provide him with an update directly or when we take the Vote, I can give him more information.
John Deasy: Whichever Ms McGrath prefers.
Clare McGrath: The Mount Congreve Foundation has submitted a proposed plan for the gardens, which would see them being open from Thursdays to Sundays from February to October. The foundation has suggested a charge in this regard and is projecting visitor figures of 100,000 based on the average number of visitors who came to open days in 2013. From the OPW's perspective in respect of the State side, the State will obtain freehold with regard to the gardens 21 years after the passing of Ambrose Congreve and in 2059 in respect of the house. In the interim, it is in the interest of the Office of Public Works that the gardens are being managed and cared for by the Mount Congreve Foundation.
John Deasy: This is significant, in that from the standpoint of the OPW, this constitutes progress.
Clare McGrath: Yes.
John Deasy: This issue has been ongoing for years now.
Clare McGrath: Yes.
John Deasy: I thank Ms McGrath. My second question pertains to the proposal for businesses on heritage sites and historic properties. It related to the proposal for businesses on heritage sites and historic properties. It is interesting because the budget for the area of built heritage in the past six years has probably diminished by 90% in some cases. From what Ms McGrath has explained, we are moving towards an element of self-financing when it comes to these historic properties and heritage sites. I apologise if Ms McGrath already answered the question, but what structure will this take? Where are we with regard to these proposals?
Clare McGrath: At the moment we have several proposals in and we are assessing them. We are allowing participants in the market to say to us how they can work with us to enhance visitor experience at heritage sites and to increase numbers. Our primary responsibility under legislation for many of the national monument sites is their preservation and conservation.
John Deasy: Will Ms McGrath draw a picture for me or give me an example of what we are looking at potentially in future? Can Ms McGrath highlight some places and explain what exactly we will end up with?
Clare McGrath: I will use the example of what we have ended up with to show what we are open to. In the Iveagh Gardens at the rear of the National Concert Hall and off Harcourt Street, we have allowed, under licence, the Taste of Dublin, comedy festivals and concerts on the site. This is opening up the gardens to other uses and increasing footfall. We receive a fee for that. It is similar with the Phoenix Park for concerts. We have provided for community use on many sites where people wish to host events. We are asking whether there is something more. We might not necessarily know what is possible for all of them. Certainly, we would not have the funds for it but the private sector may have the funds.
John Deasy: I presume the OPW has been relatively successful if it is extending the approach. Has the experience of the OPW been good as far as the financial aspects and income are concerned?
Clare McGrath: It has been positive because we are getting more use. The income goes to the Exchequer.
John Deasy: Is there an element of ring fencing?
Clare McGrath: From this year it has been identified that where we generate income a certain amount can come back in and we can invest it in the heritage estate.
John Deasy: It does go back to the Exchequer. Anyway, it is a significant departure for heritage in the country that the OPW is thinking in this manner and adopting this approach for the first time since the foundation of the State. There is an element of self-financing when it comes to these properties. It is significant for the Committee on Public Accounts to know that. Ms McGrath says it has been positive so far and that is why the OPW is extending it. Can Ms McGrath say how much has been raised?
Ms Clare McGrath (left): We are getting €350,000 additional this year in the Vote because of this initiative.
John Deasy: How many enterprises or ventures does that cover?
Clare McGrath: It goes across the entire range. Until we process the 12 applications we have now, identify what they involve and what is being sought from us, we are open. When we can identify that and the fee arrangement, I will come back to say what has been achieved in 2014.
John Deasy: How many proposals does the €300,000 cover?
Clare McGrath: We have not yet made out the proposal.
John Deasy: That is fine.
Clare McGrath: This is coming from what we have achieved. It is the existing income we derive from visitors to our heritage estate.
John Deasy: Fair enough. I thank Ms McGrath for her response with regard to Mount Congreve. Does Mr. Sydenham want to add anything to that? If not, that is fine. I think Ms McGrath explained it all.
John Sydenham (Commissioner, OPW, below): It was covered pretty comprehensively. It is welcome news that the foundation is remaining and will keep the facility open. There is an opportunity to bring in commercial interests to augment the outgoings and enhance the visitor experience. Equally, there is an opportunity for the State, at our level or at local level, to enter a partnership with the foundation to improve the visitor experience. We will explore that with the foundation.
John Deasy: Ms McGrath mentioned €250 million over five years for flood damage. Of that €250 million, what does Ms McGrath estimate the damage so far this year to be worth? I want to know whether this sum is sufficient for the future.
Clare McGrath: In terms of the catchment flood risk area management plans, what we are achieving and the areas we are identifying where we need to do the work, we will need more. We have to work towards that. To take a concrete example, Dublin is now protected by works that were completed by the OPW and Dublin City Council. The tide level in January 2014 was greater than that in 2002 but in 2014 there was very little damage. In 2002, for a lower tide there was €60 million worth of damage in Dublin. We will report under the Ireland Stat and the Government statistics that approximately €800 million worth of property was protected by the schemes. I think I spoke about 1996-1997. In schemes we have carried out since then we have achieved €800 million worth of property protected. Any scheme we carry out has a cost-benefit. The Dublin one is a very good example of what has been achieved. Due to the works done since 2002, although there was a higher flood tide level in January 2014, there was damage but it was small.
John Deasy: In other words, the OPW has averaged out the €800 million over the past 18 years and thinks on that basis that the €250 million will be sufficient for the next five years.
Clare McGrath: The Government has guaranteed the €250 million at €45 million a year to 2016.
John Deasy: I have made a rough calculation. Over the past 18 years the OPW has probably averaged €42 million per year.
Clare McGrath: We would not have been spending €45 million. That has been ramped up. It was a lesser sum earlier.
John Deasy: Coming back to this year, how much is the damage worth?
Clare McGrath: Following the recent storm there is €65 million worth of damage. That includes roads, coastal and tourism damage. Our element is those parts that protect flood defences. That is where we will help local authorities.
John Deasy: I thank Ms McGrath.