Brendan Howlin (Wexford, Labour)

I congratulate the Leas-Chathaoirleach on his election. As this is my first visit to the Seanad I congratulate all the Members and wish them well in the important work they have ahead of them in what is to be hoped will be mapping a course for our country and society to a better place.

I am privileged to introduce this Bill. Its primary purpose is to provide the legislative basis which will allow for the formal establishment of the Department of public expenditure and reform and the transfer of certain functions from the Minister for Finance to the Minister for public expenditure and reform. It is intended that the establishment of the Department will place the two important issues of expenditure management and public service reform at the heart of Government.

It is highly significant that for the first time a Cabinet level Minister has been given responsibility for driving the reform agenda. Turning first to the reform agenda, we all know that delivering a programme of reform in the coming years will not be easy. The Bill represents the beginning of a challenging journey to achieve the vision of a public service that we have set out in the programme for Government. The people deserve a public service that will be high performing, value for money and accountable.

The Bill places public service reform functions on a statutory basis for the first time. As a Government, we realise that the reform agenda cannot simply be imposed on a system of more than 300,000 people without discussion and agreement, active engagement and co-operation, and proactive and ambitious leadership at every level of the public services. I recently welcomed the conclusions of the implementation body on the Croke Park agreement which indicated that there has been solid and measurable progress to date. Nevertheless, it must be clear that there is a lot yet to be achieved.

We need to see an accelerated delivery of the full range of reforms and efficiencies envisaged under the agreement and I look forward to active engagement with public service management and unions in the task over the coming months. I, together with the Taoiseach, intend to have a formal meeting with the implementation body this afternoon. For that reason, unfortunately, I will not be able to take all Stages of the Bill but I will return to the House as quickly as I can. I hope the House will excuse my absence.

In tandem with the extensive public service modernisation reforms being pursued, the Government has an ambitious agenda for budgetary consolidation over the coming years to put the public finances back on to a sound footing. This will involve further, major savings and efficiencies in the expenditure area, coming on top of the expenditure consolidations of the past two or three years. There is acceptance that we cannot afford to spend the same amount on our services as we currently do. Maintaining key services requires prioritisation and smarter, more efficient and more effective ways of delivering those services.

We find ourselves today facing unprecedented economic challenges. The recent flow of economic data provides some grounds for cautious optimism. The public service must play its part in our national recovery. We have to be ambitious and ensure that the reform initiatives we undertake, informed by the outcome of the comprehensive expenditure review I have initiated and delivered within the Croke Park agreement, will deliver a slimmer, more streamlined, efficient and effective public service. This is essential if we are to bring permanent sustainability to the Government finances and ensure the public service can, and will continue to, make a positive contribution to our economic growth. The introduction of pay ceilings for higher posts across the public service, last week, was intended to send a clear signal that reform must begin at the top.

I turn to the Bill before the House today. It marks the final part of the first of many steps to achieve the vision we have set out for the public service. In its own way, it will make a positive contribution to restoring economic growth and sustainability to our national finances. I will go through the sections and give a brief outline of their content and purpose.

Part 1 deals with preliminary and general matters. Specifically, section 1 deals with the Short Title, collective citation and construction. Section 2 defines certain terms used in the Bill. Section 3 defines a "Public service body". Section 4 allows for regulations to be prescribed for any matter referred to in this Act.

Part 2 deals with the new Department of public expenditure and reform. It transfers many of the general statutory functions of the Minister for Finance in relation to the public service to the Minister for Public Expenditure and Reform, and puts public service reform and modernisation functions on a statutory basis for the first time. Section 5 provides that the Government may determine, by order, a day to be the "appointed day" under the Act. It is intended that it will be 5 July. Hopefully, we will have the assent of both Houses, the President's signature and the formal commencement order signed by the Taoiseach. Section 6 provides for the establishment of the Department of public expenditure and reform, and the Minister for public expenditure and reform in the English language; and An Roinn caiteachais phoiblí agus athchóirithe agus an tAire caiteachais phoiblí agus athchóirithe in the Irish language.

Section 7 provides that the Minister for public expenditure and reform will have responsibility for the management of gross voted expenditure and the annual Estimates process, general sanctioning powers on expenditure and policy matters relating to the appraisal, review and evaluation of expenditure, while the Minister for Finance will retain responsibility for overall budgetary parameters. Section 8 contains a broad provision transferring the general public service statutory functions of the Minister for Finance to the Minister for public expenditure and reform. A number of offices currently under the aegis of the Minister for Finance will also transfer to me, as Minister for public expenditure and reform, under this section. These include the Commissioners of Public Works, the Commission for Public Service Appointments, the Public Appointments Service, the Valuation Office and the State Laboratory.

A large number of remaining statutory functions which are appropriate for transfer to the Minister for public expenditure and reform, will be transferred by way of a Transfer of Functions Order, which will be timed to commence as soon as possible following the commencement of this Act. In essence, rather than have a recitation of a very long list, we will only formally transfer on a statutory basis that which the Parliamentary Counsel indicated would have to be formally transferred statutorily. The rest will be transferred by a Transfer of Functions Order.

The Schedules to the Bill list the functions which will be exercised in co-operation with the Minister for Finance. Section 9 details the specific public service reform and modernisation functions which are being put on a statutory basis to reflect the new reform function included in the name of the Department. The Minister will also assume responsibility for existing non-statutory functions of the Department of Finance and the Department of the Taoiseach in the area of public service modernisation, development and reform. In fact, the sub-element of the Department of the Taoiseach concerning modernisation, has already been transferred to my Department.

The statutory functions will include the formulation and development of policies required for the modernisation and development of the public service, and making proposals to Government on the implementation of those policies, along with the co-ordination and review of the implementation of those measures across the public service. The functions also include the promotion of value for money in the provision of public services and the development of policy and procedural frameworks in relation to the procurement of goods and services by the State.

Section 10 provides for the transfer to the Department of public expenditure and reform of the administration and business connected with the transferred functions. Section 11 provides that if legal proceedings involving the Minister for Finance are in train in relation to a transferred function immediately before the appointed day, these proceedings will, following the appointed day, be deemed to relate to the Minister for public expenditure and reform. Section 12 provides that any work commenced before the appointed day, by or under the authority of the Minister for Finance in relation to a transferred function, will be carried on and completed by the Minister for public expenditure and reform.

Section 13 provides that any legal document made by the Minister for Finance in relation to a transferred function will continue to have effect as if it had been made by the Minister for public expenditure and reform. Section 14 provides that any references to the Minister for Finance in relation to a transferred function in any legal document or in the memorandum and articles of association of any company shall be deemed to be references to the Minister for public expenditure and reform.

Section 15 provides that all property, rights and liabilities, moneys, stocks, shares and securities held by the Minister for Finance in relation to any transferred function will transfer to the Minister for public expenditure and reform without any further legal actions. Section 15 also provides that the consent of the Minister for Finance will be required in the disposal of assets and the application of the proceeds from the disposal of assets of State bodies, where such assets exceed a value of €50 million.

Part 3 deals with the performance of certain other functions including those relating to the Estimates. Section 16 sets out the responsibility of the Minister in the annual Estimates process. This provides that the Government will approve an "annual approved expenditure amount" - in essence, an envelope of expenditure - which can be reviewed in the course of a financial year if circumstances require. The Minister for public expenditure and reform will have full responsibility for the management of gross voted expenditure as set out in section 7, within the annual approved expenditure amount or the revised annual approved expenditure amount, as appropriate. The Minister for Finance may make recommendations to the Minister for public expenditure and reform on the apportionment of the "annual, or revised annual, approved expenditure amount" as between current and capital expenditure.

Section 17 provides for appropriate changes to the Central Fund (Permanent Provisions) Act 1965 to give effect to the powers of the Minister for public expenditure and reform in relation to voted expenditure and to link the policy function of the Minister for public expenditure and reform with the payments role of the Minister for Finance. The Minister for Finance will retain technical responsibility for payments from the central fund. The Secretary-General of the Department of Finance will remain as Accounting Officer for the central fund and the finance accounts. I wish to clarify that point. The central fund, from which all public expenditure comes, will remain in the control of the Minister for Finance. However, the dispersal of funds from the central fund will be made automatically by the Minister for Finance on request from the Minister for public expenditure and reform. The Accounting Officer will remain as the Secretary General of the Department of Finance.

Section 18 provides that certain functions relating to the promotion and co-ordination of economic and social planning for the development of the economy and the identification of policies for general economic and social development may be exercised by either Minister separately but that they shall consult from time to time in regard to these functions. This is an interesting element. One of the tasks we had to do, which is why it has taken so long to bring this Bill before the House, was to trawl every statutory enactment and order back to the early 1920s and, as Members can imagine virtually every Act and statute references in some way the Minister for Finance. We had to disaggregate what is now appropriate to the new Department and the new Minister. I do not know if any Member has been here long enough to remember the old Department of economic development that was established at one stage, but the residual economic development function, which was transferred on the abolition of that Department to the Minister for Finance, will be now be shared jointly so that each of us will have an economic development role.

Section 19provides that the functions transferred to the Minister for public expenditure and reform, referred to in section 8(2) and detailed in Part 1 of Schedule 2, may be performed with the consent of the Minister for Finance. These include provisions of certain Acts mainly relating to borrowings by State agencies. Section 19also provides that the functions referred to in section 8(3) and detailed in Part 2 of Schedule 2 may be performed only following consultation with the Minister for Finance. These relate mainly to the review mechanism in the financial emergency measures in the public interest legislation. The FEMPI legislation, as it is sometimes vulgarly called, which is an important part of the process of accruing money to the State, will now transfer to me and any amendment of it will be done following consultation with the Minister for Finance. The overall macroeconomic state of the economy will remain the purview of the Minister for Finance.

Section 20ensures that responsibility for matters relating to superannuation, remuneration and so on of bodies under the aegis of the Minister for Finance remains with that Minister. The Minister for Finance will perform those functions following consultation with the Minister for public expenditure and reform.

Some functions are transferred collectively under section 8. These relate to the broad public service functions of the Minister relating to superannuation, remuneration and so on and also to the functions of bodies under the aegis of the Minister.

Sections 21 and 22are intended to provide for a potential scenario where one Minister may inadvertently perform a function of the other believing it to be a relevant function of that Minister. Therefore, a function of the Minister for Finance performed by the Minister for public expenditure and reform shall be valid if at the time the Minister for public expenditure and reform believed that the function vested in him under the section and vice versa. This does not include those functions for which the specific statutory provisions are explicitly transferred under this Bill. It refers only to functions transferred by way of a general description. In case Members are concerned about this particular section, it is a genuine Parliamentary Counsel belt and braces job. We have trawled every function and assigned responsibility either to the new Minister for public expenditure and reform or to the Minister for Finance in regard to all these functions. However, if matters arise in the future that we have not thought about and it is presumed to be the role of the Minister for Finance but on legal challenge it was deemed actually to be more appropriate to the Minister for public expenditure and reform, they will remain valid as if they were exercised properly with the expectation that they were exercised with the appropriate authority.