Phil Hogan (Carlow-Kilkenny, Fine Gael)

I welcome the opportunity to introduce this Bill to the House. It proposes to amend existing dormant accounts legislation in order to dissolve the Dormant Accounts Board and transfer the statutory functions of the board to the Minister for the Environment, Community and Local Government.

The report of the special group on public service numbers and expenditure programmes, better known as the McCarthy report, recommended the discontinuation of the Dormant Accounts Board, which has statutory functions relating to disbursements from the Dormant Accounts Fund. The report stated that this would result in an annual saving to the Exchequer of €1.7 million. It should be noted that the vast majority of the administrative budget for dormant accounts is paid annually to Pobal, which administer the dormant accounts measures of this Department and certain other Departments. Expenditure under the fund is spread across ten Departments and agencies.

The rationale behind the group's recommendation was as follows:

Given that the level of funds transferred into the fund has declined in recent years, the Group concludes that the Dormant Accounts Board should be discontinued. Remaining projects funded by the Board should be processed to their conclusion.

As the levels of new measures or programmes for disbursement from the fund are likely to remain very low for so long as the current budgetary constraints prevail, the justification for having a body in situ is limited, particularly one that has little involvement in the approval process.

Currently, legislation provides for a scheme to transfer dormant accounts in banks, building societies, An Post, as well as unclaimed life assurance policies, to the care of the State, while guaranteeing a right of reclaim to those funds. The main purpose of the legislation is to reunite account holders or policyholders with their funds in credit institutions and insurance undertakings and in this regard, such institutions and undertakings are required to take steps to identify and contact the owners of dormant accounts and unclaimed life assurance policies. The legislation further provides for a scheme of disbursement, for charitable purposes, or purposes of societal and community benefit, of funds that are not likely to be reclaimed. The fund consists of a reserve account from which reclaims and various expenses are paid and an investment and disbursement account from which investments and disbursements are made.

Under this Bill, the objectives underpinning disbursements from the Dormant Accounts Fund will remain unchanged, that is, disbursement will assist persons who are economically or socially disadvantaged, educationally disadvantaged or who have a disability. Future disbursements must have regard to those three areas, the priorities and policies of Government, the availability of moneys, the cost-effectiveness of the expenditure and the outcome of any previous reviews of disbursements plans.

Transparency in decision-making on disbursements from the fund is critically important. The fairness of any grant scheme and decisions made for funding under it are likely to be subject to scrutiny. Given the special nature of dormant accounts funds, which are private citizens' money and not Exchequer funding, there will be a reasonable public expectation that the disbursement process should be clearly fair and equitable. This is the reason the Government will considerable efforts in the legislation to ensure this is the case, particularly by providing for Oireachtas or public scrutiny of the process, as well as ongoing reviews, which will be available to the public.

Everyone in the House welcomes the use of such unclaimed moneys for the betterment of the less well-off in our society. Such good work for the public good must continue, which is exactly the intention of the Bill. More could be done. However, if one is serious about tackling severe disadvantage, the State must use all resources available to it for this purpose in a particularly focused and sustained way. It is doubtful whether current arrangements can secure optimal impact in this regard. A more sensible approach, which underpins the Bill, is to draw on the expertise, knowledge and resources of existing public bodies. One must be careful about using taxpayers' money correctly and there is no point in setting up another body to work through these issues if knowledge and expertise already resides within existing public bodies. The objective is to avoid unnecessary bureaucracy and to enable informed, objective decision-making consistent with public policy priorities and available resources.

In practice, this means that each year, following broad approval of programmes and types of projects for funding, applications will be publicly invited for eligible programmes or projects. Following evaluation of such applications by or on behalf of public bodies, I will, with the consent of the Minister for Public Expenditure and Reform, approve a range of specific measures and projects. A statement containing details of the approvals will be laid before the Oireachtas and a list setting out the approved measures and projects and specifying the amounts to be disbursed, will be published within one month. These arrangements demonstrate the Government's commitment to streamlined, transparent and effective administrative arrangements and they are grounded in reality. These rigorous and extensive measures confirm the Government's absolute commitment to ensure that decisions on the fund are informed by Government policy and the public interest, as well as being accessible to public application and fully subject to public scrutiny.

The Bill maintains the requirement for separate recording of dormant accounts spending through the Votes of Departments. This means, for example, that where Dormant Accounts Fund expenditure for a project for a community group is approved, the relevant funding will be channelled through the Department dealing with that sectoral group. In this way, dormant accounts spending can be tracked across Departments with enhanced transparency and accountability. Under Government accounting procedures, disbursements on dormant accounts measures are paid in the first instance "up-front" from the Department's Vote in the same way as with any other spending programme. The difference with dormant accounts expenditure compared with other funding programmes is that once expenditure takes place, either on administration of the measure or by the project itself, it is reimbursed to the Exchequer from the Dormant Accounts Fund in accordance with the Dormant Accounts Acts, in the form of appropriations-in-aid payable through the relevant Department's Vote. In this way, the costs associated with dormant accounts measures are Exchequer-neutral, although it should be noted that Departments cannot spend appropriations-in-aid directly themselves once they are reimbursed from the fund. They are instead refunded to the central Exchequer. Moneys disbursed from the fund increase Government debt levels as the money continues to belong to the account holder, who can reclaim it at any time, and not at any stage to the State. Consequently, every euro spent from the fund is regarded in accounting terms as a potential Government liability. Therefore, the Dormant Accounts Fund cannot be regarded as free money, as it were.

I wish to convey to the Dormant Accounts Board the Government's appreciation for the work it has undertaken to date. Following its establishment in January 2006, the board developed disbursement plans that established the framework within which disbursements from the fund would be approved. Money from the fund was spent and continues to be spent on a wide range of projects and activities across diverse geographical areas, but with one essential common thread, namely, the alleviation of disadvantage. In accordance with the plans, priority funding is earmarked for RAPID areas, substance misuse, persons with a disability and in the area of educational disadvantage. The Government is fully committed to continuing to use the fund for these types of projects and work.

The more detailed technical provisions of the legislation are set out in the explanatory and financial memorandum accompanying the text of the Bill. While I have spoken about some of the key areas, I propose to outline the main provisions of the Bill. Sections 1 and 2 are standard provisions relating to definitions and so on. Section 2 specifically provides for the appointed day to be determined by order, which is the day the Act comes into force, the Dormant Accounts Board is dissolved and the functions of the board are transferred to the Minister.

Section 3 replaces Part 6 of the principal Act, as inserted by section 8 of the Act of 2005, and sets out the new disbursement arrangements. Sections 40A to 44A are subsets of section 3 of the Bill. Section 40A updates definitions to take account of changes provided for in the Bill. Section 41 sets out the purposes under which disbursements can be made. Section 42 provides for the making of a disbursements scheme no later than 12 months after the appointed day and will set out the types of programmes or projects for which moneys may be disbursed. The disbursements scheme or any subsequent amendment to it must be prepared by the Minister having consulted the Minister for Health, the Minister for Education and Skills and the Minister for Social Protection. The Minister may also consult other Ministers or persons. A scheme or an amendment to a scheme must be approved by Government and must be laid before each House of the Oireachtas, and the Oireachtas will be allowed 21 days to challenge it.

Section 43 provides for the preparation of an action plan each year where the Minister has made a scheme. The process of making the action plan is very similar to that of the disbursements scheme in terms of consultation with other Ministers and so on. Once the plan is adopted, a copy is laid before each House of the Oireachtas, where it may be challenged within a 21-day period. The action plan must also be published. Provision is also made for adopting or not adopting an action plan and for not proceeding to invite applications under an action plan if appropriate in particular circumstances. Any decision not to proceed must be approved by Government.

Sections 43A and 44 provide that a Minister, within whose remit lies responsibility for a programme or type of project specified in an action plan, is required to publish or cause to be published an invitation to apply for disbursements, which shall include the assessment criteria, the application procedure, the deadline and any other information a Minister wishes to include. It also provides for applications to be assessed by or on behalf of a Minister. As is currently the case, following assessments, recommendations must be made as to which measures or projects should receive disbursements. These recommendations are submitted in the first instance to the relevant Minister. They are then submitted to the Minister for the Environment, Community and Local Government for approval, subject to the consent of the Minister for Public Expenditure and Reform. The Minister for the Environment, Community and Local Government's recommendations are submitted to the Minister for Public Expenditure and Reform for approval. The list of approved measures and projects is laid before both Houses of the Oireachtas.

Section 44A provides that disbursements must be paid from the Oireachtas and reimbursed to relevant Ministers on the direction of the Minister for Public Expenditure and Reform by the NTMA and must be regarded as appropriations-in-aid.

Section 4 is a technical amendment, updating cross-references to the NTMA and the board. It also provides that the Minister must, before 30 June each year, prepare an annual report on disbursements during the preceding year, to include any findings, conclusions or recommendations concerning such operation. The annual report is submitted to Government and then laid before each House of the Oireachtas.

Section 5 provides for the dissolution of the Dormant Accounts Board, with any references to it in any enactment or legal document to be construed as a reference to the Minister. The chairperson of the former board will remain accountable to the Committee of Public Accounts in respect of disbursements by that board during his tenure. This is a quite standard provision for former chairpersons of State bodies.

Sections 6 to 8, inclusive, make standard provision for transfer of assets, liabilities, taking over contracts, etc. Section 9 provides that the board must prepare final accounts, covering the period from the last annual accounts up to the day immediately before the appointed day. These accounts are to be submitted to the Comptroller and Auditor General for audit, and the audited accounts must be laid before each House of the Oireachtas.

Section 10 provides for the final report of the board, including particulars of those to whom disbursements were made and the amount of each disbursement since the last annual report of the board. This report will be laid before the Houses of the Oireachtas. Section 11 provides for the Minister to take ownership of the records of the board. Section 12 provides that the plan for 2009 to 2011, as prepared by the board and approved by Government, continues in effect until the Minister's first disbursements scheme is made, and must be treated the same as if it was a disbursements scheme made by the Minister.

Section 13 updates the principal Act to take account of the new term, "disbursement scheme", and other technical amendments. Section 14 provides for repeal of sections 30 to 40, inclusive, of the principal Act relating to Dormant Accounts Fund Disbursements Board provisions. Section 15 deals with the Short Title, collective citation and commencement.

The Government has provided for a range of rigorous measures in the Bill to secure transparency and accessibility by ensuring decisions on the fund are informed by the public interest, accessible to public application and fully subject to public scrutiny. The Bill will assist the State in using the resources available to it in a more focused and effective way for the purpose of tackling severe disadvantage. I commend the Bill to the House.