PAC Meeting: April 16, 2015

Re: Broadband infrastructure

[Extract]
Mr. Mark Griffin (Secretary General, Department of Communications, Energy and Natural Resources) called and examined.

Deputy John Deasy: I will tag onto what the Chairman has mentioned and what Mr. Griffin spoke about with regard to the national broadband plan. 

Mr. Griffin has only been in place for a year and a half and I have not had an occasion to question him at this committee. Leaving the historical issues behind, something which I believe will define his time as Secretary General will be how successful he is in rolling out the national broadband plan. 

I wish to ask about the way it was announced and is being operated in the Department.  Rural areas with smaller population densities, or with fewer than 900 people, are not seen as economically viable. We have what is called State intervention on one hand, and I hope the commercial operators will actually provide the crossover so we will cover 96% or 97% of the entire country by 2020.

The mapping process was published last November, pinpointing the geographical areas requiring State intervention. The public consultation process on the accuracy of the maps closed for submissions in February of this year. 

In my constituency, it is estimated that approximately 29% of the entire land area will not be covered by the commercial operators. The area has 17,000 or 18,000 households. In the past four or five years, in particular, and for longer in certain locations, including coastal villages such as Bunmahon and in Kill, broadband is the major issue for people with businesses. People who want to start businesses cannot get a proper broadband service.

I understand that the Department was meeting telecommunications companies in February and March of this year. I want to find out how much on schedule the Department is with regard to rolling out the project. 

How is it going? I understand Vodafone made its announcements yesterday or the day before. It is in competition with Eircom. How is this going? What is the timeline considering what the witnesses announced, and what is the current position?

Mr. Mark Griffin: The project is going very well. I will come back to the specific points the Deputy raised, because they are very important, but I will take the last point as an example and knit it into the broader discussion we have had today about project governance. 

We have a very effective and robust project governance arrangement in place for the national broadband plan. I refer to a formal project plan setting out critical paths, milestones, deliverables, resources, funding, risks and issues, steering groups with the appropriate governance, financial, administrative and technical expertise, checkpoint meetings, risk and issue management and change request systems. 

To pick up on the point raised [earlier] there is a reference to regular reporting to senior management. I am briefed on this very regularly. I have two meetings scheduled, for tomorrow and Monday, to go through some of the funding and cost-benefit analysis issues. The Minister is briefed on a very regular basis and is very much in command of where the project is at and where we need to go. 

Obviously, we discuss it at the management advisory committee meeting we have with the Minister every four weeks. We also buy in external expertise to advise on key aspects of some of the projects, such as the CBA stuff, funding options, procurement and so on.

Deputy John Deasy: That was going to be published in July. Is that correct?

Mr. Mark Griffin: It is still on track. The intervention strategy is to be published in July for the consultation process. Work on the issues around funding, the cost-benefit analysis, the ownership model and all the technical work is under way and nearing completion. The intention is to go to tender towards the end of this year, with the first elements of the roll-out to commence in 2016, with the aim of completing the project in 2020.

As the Deputy knows - he is very familiar with the maps - one is talking about the intervention area the Government has to manage, covering 96% of the land mass of the country. It covers approximately 750,000 properties. If my memory serves me correctly, there are about 80,000 farm holdings within that. This is a big prize; it really is. 

I have a number of key priorities that the Department will be dealing with over the next couple of years. I would set that up as among the top one or two. All the resources that are required in the Department to deliver that and any external resources we require to back us up are being put in place. 

I am very comfortable about the governance arrangements in place for the management of the project. A very significant block of work that we have commissioned from external consultants concerns what governance arrangements need to be in place for the project for the five-year period. Also to be determined are the governance arrangements that need to apply, perhaps for a longer period, over a contract term.

Deputy John Deasy: Some of this was dependent on European Investment Bank, EIB, funding. What is the story with that?

Mr. Mark Griffin: We are looking at a range of funding options. We have a commitment of €75 million from the ERDF and we have been in touch with the EIB. We had been in touch with the Ireland Strategic Investment Fund and we have also been in touch with external private commercial lenders, as have some of the companies. Therefore, all that work is ongoing.

Deputy John Deasy: In rolling this out, Mr. Griffin is talking to funding entities, but he has not reached any resolution with them. I refer to the EIB, the Ireland Strategic Investment Fund and private equity.

Mr. Mark Griffin: I expect that to come to closure over the next couple of months. Obviously, we will need to be in discussion, as we are, with the Department of Public Expenditure and Reform in the context of the Estimates and multi-annual capital programme in relation to whatever level of Exchequer investment is required to fund the programme.

Deputy John Deasy: People have been let down time and again over the past ten years, particularly in the area I am from, which is rural Waterford. I worry when I hear Mr. Griffin saying the funding has not been put in place for something that has been announced. 

It has been announced that it will be completed by 2020. This is a fair point. We are dealing with public money here and talking about public expenditure and reform. There is no funding secured for this project as of now beyond what the Department of Public Expenditure and Reform will give.

Mr. Mark Griffin: Beyond what the ERDF has committed to. There is strong Government backing for this project. Before the final-----

Deputy John Deasy: That is not quite what I asked.

Mr. Mark Griffin: I know that.

Deputy John Deasy: This is important. I am asking questions that I am not sure I can answer any longer.

Mr. Mark Griffin: Yes.

Deputy John Deasy: I have been asking them for far too long. There is too much riding on it. As Mr. Griffin said, this project is his priority as Secretary General for the next few years. This is why I am asking him about this. It is defining in regard to his role in the Department. We do not have the funding in place to roll this out right now.

Mr. Mark Griffin: There is a block of work to be completed first regarding the estimated overall cost of the intervention. In parallel with determining that, we need to assess what the available funding options are. Some of that will be commercial through the EIB, potentially through the ISIF, and obviously the companies that bid will place a strategic value of the investment.

Deputy John Deasy: There is no guarantee that they will tender.

Mr. Mark Griffin: I have no doubt whatsoever that they will. Our contacts suggest there will be a strong level of interest in it.

Deputy John Deasy: What is the problem with the strategic investment fund? It is well publicised these days. It is so under-subscribed it is not funny. There is a fund of €5 billion or €6 billion, but very little of that - just over €104 million - has been taken up. What is the problem in accessing the funding?

Mr. Mark Griffin: I do not believe there is an issue. Obviously, the fund will lend on commercial terms and will want to make sure all the i's are dotted and t's crossed in terms of the work we need to complete to feed into that. 

However, that work is very well advanced. We have a number of draft reports from the consultants at this stage which should allow us to close out substantively on aspects of that.

Deputy John Deasy: The Department is finishing its intervention strategy in July.

Mr. Mark Griffin: Yes.

Deputy John Deasy: It is meeting the companies in the meantime.

Mr. Mark Griffin: We meet companies on an ongoing basis.

Deputy John Deasy: Given my perspective on the Department, my understanding of what we are dealing with today and the fact that I agree with Mr. Griffin as far as the historical issues are concerned, I believe this project is the big issue and the big-money item that the Department will be dealing with for the next four or five years. It worries me slightly that the funding is not in place yet for something that has been announced many times. We should keep tabs on this.

Mr. Mark Griffin: In any project, there are several stages of planning before the final commitments around a number of things. I would like to think we have the bulk of the planning work done and that, over the next few months, we will be in a position to call it in relation to some of the key issues the Deputy has outlined.

Deputy John Deasy: The physical roll-out of this was planned for late 2016. Are we on track with regard to the beginning of that physical roll-out?

Mr. Mark Griffin: Yes.

Deputy John Deasy: Will it be late, middle or early 2016?

Mr. Mark Griffin: Realistically, we are talking about the second half of 2016.

Chairman: The Department is before us in three weeks' time.

Mr. Mark Griffin: The committee will have many more opportunities to quiz me on this and a range of other things.

PAC Meeting | March 5, 2015

[Extract]
Clerk to the Committee: Arising from Chairman's request, I contacted the London office [of HSBC] and I got a phone call late yesterday evening when I came back from Belfast to say that the reason the banks' representatives appeared before the UK Public Accounts Committee is that its headquarters is in the UK. 

It did not mean any disrespect to this committee but it does not have any information. That is the gist of the information they gave me. The letter they sent says they are not in possession of records with regard to this matter.

Chairman (Deputy John McGuinness): Is this from the Dublin office?

Clerk to the Committee: Yes, and the bank is headquartered in London. That is why the bank attended the Public Accounts Committee in London.

Deputy John Deasy: That is a flimsy excuse to give for not coming in. From what the Chairman said, we can take up the offer to attend. Are they willing to come in?

Chairman: The letter says that they are willing and that they would send representatives but they do not know how helpful their representatives could be. If the individual in London was helpful to the Public Accounts Committee in the UK, surely they can provide information via him that is of interest here. 

If it is the wish of members, we can get back to HSBC in Dublin and in the headquarters and suggest they send to the meeting of the PAC someone who has some briefing material.

Deputy John Deasy: We should ask them in and take them up on the offer to come in. Let us not beat around the bush. We can ask them questions correctly. If the representative comes back and says that he does not have the information, we will make our minds up then.

Chairman: They may be separate entities within HSBC, but before getting into that, we should write to Mr. Duffy again and to the individual who appeared before the Public Accounts Committee in the UK and ask if someone can be briefed who can assist us with our efforts with the Revenue Commissioners. That would be helpful. A representative should be here.

[Later]
Chairman: As there is no other business, we will agree our meeting for Thursday, 12 March at which we will have presentations from the Revenue Commissioners and HSBC. I will ask the clerk to report to committee members on the availability of the delegate from HSBC and on what we can expect, so that members are briefed before the meeting.

...I will ask the clerk to ensure members are aware of the response from the HSBC and the extent of the information the delegate will have, so that we are clear in regard to what information can be gleaned through questions.

In regard to the HSE, we should get representatives in as soon as possible. If that is to happen next week, we will sit on Tuesday. The matter is in the public domain and because the HSE caused it to happen, we need an explanation. They will be told we are available to meet them on Tuesday or Wednesday.

PAC Meeting | Feb 12, 2015

Chairman (Deputy John McGuinness): Turning to the work programme, Deputy  McDonald has raised a question regarding the Revenue Commissioners and the recent controversy.

Deputy Mary Lou McDonald: I spoke to you, Chairman, and the Clerk of the Committee, about the revelations regarding HSBC and 350 deposit holders with deposits of in excess of €3 billion. We understand that the Revenue Commissioners have recovered €4.55 million by way of tax settlement. 

I am anxious that we contact the Revenue Commissioners to ask them for a detailed briefing on these matters and that we then invite them to appear before the committee so we can examine the matters with them. I wish to make that formal proposal.

Deputy Joe Costello:  I support what Deputy McDonald has proposed. It is a major scandal that over €3 billion in the accounts of over 350 Irish citizens would be in a bank of this nature, which is very questionable in the manner in which it operates. 

A similar situation has transpired in Britain, where over 1,000 British citizens were in the same situation. HM Revenue and Customs have collected approximately £135 million in that country. The small amount that appears to have been collected is causing major issues.

The Revenue Commissioners would have had access to the information almost five years ago and have operated in private in all the investigations that have taken place. We do not know the extent of the investigations. 

We know the extent of the findings, which is that 22 account holders produced €4.5 million. That is from 350 clients and over €3 billion in cash. One is the subject of a criminal investigation. I understand there is also only one criminal investigation in the United Kingdom. In addition, this bank, HSBC, has over 500 subsidiaries which are largely in tax havens. Has that been chased up?

There are major questions to be answered. I agree that we should get a full and frank report on the matter and that we invite the Revenue Commissioners to appear before the committee on this issue.

Deputy John Deasy: First, I do not believe there is anything wrong with having an account in HSBC. Second, before we ask the Revenue Commissioners to appear before the committee we should ask them for the report and then make our decision. 

The Revenue Commissioners have proven to be quite adept at dealing with tax evasion and tax avoidance over the past 20 years. At least we should give them the opportunity to explain the issues. It might not be the case that there is tax avoidance or evasion in some of these cases or that criminality is involved. 

At the very least we should allow them to put together a briefing note for the committee before we make a decision about a public hearing.

Chairman: That is the proposal, that we seek the information and make a decision arising from that. They have to make clear to us the number of account holders, the number investigated by the Revenue Commissioners for suspicion of tax evasion, the number who have been prosecuted, the settlements and the amount involved, including penalties, the resources that were dedicated to examine HSBC and include a note on the way in which the information was obtained in the first place. 

All of that is relevant information that should be sought by the committee, because there is a need to clarify matters for the general public who have simply read the reports in the newspapers. It says something about the work of public accounts that the Public Accounts Committee in the UK is meeting to discuss this issue and it has staff from HM Revenue and Customs appearing before it.

I agree with seeking the report. However, when the news broke initially there might have been a letter from this committee or, perhaps, it should have been a proactive approach by the Revenue Commissioners to say, "This is what we have done. We know you might be concerned about it", and to set the case out before us. 

When the Clerk of the Committee writes to the Revenue Commissioners he should say that we need this information as soon as possible. The information has been compiled over the last number of years, although it has only become public now, so it should be to hand. They should send us a comprehensive report on the matter as soon as possible. 

If it could be done within a week, which I believe it can, we could deal with it at our meeting next Thursday and decide after that.

PAC Meeting | Jan 22, 2015

[Extract]
Deputy John Deasy: I wish to ask the clerk whether he knows off the top of his head how many times the Department of Social Protection and the HSE come before the committee per year. Is it normally once or twice?

Clerk to the Committee: It depends on the number of chapters in the Comptroller and Auditor General's report. Normally the HSE comes before the committee at least twice a year and the Department of Social Protection generally comes before the committee once a year although it is a big spending Department.

Deputy John Deasy: That is my point. The Department of Social Protection spends approximately €20 billion. The amount has been reduced slightly in recent years. The Department of Health spend is probably approximately €13 billion. We must deal with every agency, and in some cases we deal with them once every two or three years. 

Some of the agencies do not see the inside of this room during the term of an Administration and I understand this. Is there a case to be made that the Department of Social Protection and the HSE should come before the committee more frequently considering the amount of money involved? 

The remit of the committee is to examine spend and value for money. The Department of Social Protection comes here only once a year. An argument can be made it should come before the committee more frequently. This is not to say it is doing anything wrong or spending money improperly, but based on the spend it is reasonable.

Clerk to the Committee: It is a matter entirely for the committee. Sometimes the issue with the Department of Social Protection is regularity, as the majority, or 99%, of the payments are fine. It is only when the Comptroller and Auditor General raises specific concerns about individual schemes that we are inclined to examine the issue. 

I will speak to the Chairman about it and we will see whether we can have a more regular schedule for the Department of Social Protection. Sometimes it is difficult when it comes before the committee because members want to raise a range of issues. It is very hard to compartmentalise and deal with one scheme.

Deputy John Deasy: Ultimately the question is for the Comptroller and Auditor General. Given its budget of €21 billion can he really deal with the Department of Social Protection in one meeting per year considering the complexity and variety of issues? 

I know what I deal with in my constituency offices. The problems people experience usually take up half a day because they are complex. Policy issues arise all the time with regard to how money is spent or not spent. An argument can be made that the Department should come before the committee more frequently.

Mr. Seamus McCarthy (Comptroller & Auditor General): I suggest the committee examines the programme and schedule issues to discuss with the Department. Rather then bringing before it the Department of Social Protection to cover everything, the committee could identify some issues to be discussed with the Department. The meeting could focus on these and the committee could explain to the Department that it will be brought before the committee again to discuss the remainder of the issues. 

Accounting Officers coming before the committee for a meeting which has a completely broad canvas must prepare everything with regard to their business. They are able to deal with many issues, not exactly off the cuff but because they have general familiarity, but if the committee flags specific interests to an Accounting Officer it could lead to a more focused and effective meeting.