Phil Hogan (Carlow-Kilkenny, Fine Gael)

I suspect it will not always be the case. Anyway, I thank all Senators for their contributions to the debate. It was interesting to hear the different perspectives which focused on the dormant accounts aspect of the Bill generally, as one might expect.

I refer to some of the contributions made. Senators Keane and Burke mentioned the banks and whether they would be inspected. This issue was taken up by Senator Wilson as well. How do we ensure they are compliant with the legislation? Under the Dormant Accounts Act 2001, which has been amended several times with regard to unclaimed life assurance policies, the Financial Regulator and the Central Bank may authorise inspectors for the purpose of ensuring compliance. I understand the Central Bank, acting on behalf of the Minister for Finance, has engaged PricewaterhouseCoopers to carry out inspections on dormant accounts over a two year period. They have completed the first two inspections. There is engagement by the Minister for Finance to ensure compliance with the legislation and this is welcome.

Senator Harte made a valid point about pension funds. As a former insurance broker like Senator Harte, I understand that there would be some lying around in terms of pension funds from various individuals who may not have claimants. The position regarding dormant accounts funding is that, in practical terms, increasing the amount available in the fund does not necessarily allow for the introduction of new dormant account measures or programmes. Although supplying the provisions of the dormant accounts legislation to pension fund accounts would increase the amount available in the fund, Departments and agencies must still source the moneys for dormant accounts programmes and measures from their Exchequer allocation in the same way as any other funding programme.

It is interesting to note how Departments treat these funds for accounting purposes. Since the funds are claimable by the individual or their estate on an ongoing basis until such time as the account is declared a dormant account, it remains a liability on the State in accountancy terms. When the money expended on dormant accounts measures and programmes are reimbursed from the dormant accounts fund, the refund is to the Exchequer rather than the spending Department. I will seek to establish the position regarding pension funds and the level of interest in that matter in advance of Committee Stage and I will come back to it. I understand the point the Senator is making.

Senator Cullinane raised the matter of ring-fencing the money. The Senator will appreciate that given the focus as set down in the legislation a significant proportion of the funding disbursed to date from the fund is already channelled through community and voluntary groups under the existing arrangements. This is in addition to the other substantial supports provided by the Department of the Environment, Community and Local Government to that sector annually through other schemes and programmes. The intention has always been to ensure a broad and balanced range of potential beneficiaries from dormant accounts disbursements and this should continue in future rather than focusing on a particular sector. In any event, given the reduced level of funding available for disbursement from the fund, ring-fencing is not feasible.

The issue of the current surplus in the account was raised. Since the establishment of the fund in April 2003 to the end of August 2011, the transfers to the fund have totalled €626.59 million, including interest earned of some €35.53 million. Funds reclaimed in this period by account holders amounted to approximately €218.7 million and the net value of uncommitted funds is €81.991 million.

Other speakers referred to some key general provisions of the Bill and I welcome the contributions of Senators Barrett and Cummins in this regard. When dormant accounts legislation was introduced first the priority was to ensure that large financial institutions would not benefit from the money, which had happened previously, but that the money would go back to account holders or people who were deprived or disadvantaged. This will continue to be a priority under the new arrangements.

As recommended in the McCarthy report, the Bill proposes to dissolve the Dormant Accounts Board but it would transfer the statutory functions of the Dormant Accounts Board to the Minister for the Environment, Community and Local Government. The existing arrangements will continue. This will strengthen Government and Oireachtas oversight of the area while simplifying the arrangement and the associated processes in respect of grants awards from the dormant accounts fund. Decisions on the spending of the dormant accounts fund will be streamlined and less intrusive of Government business and this will enhance the effectiveness and efficiency and the manner in which we make disbursements. The objectives of the scheme will remain the same and the Bill reaffirms that dormant accounts funding will continue to be spent to assist persons in the categories outlined already.

Disbursements will continue to be made through Votes of relevant Departments and will be Exchequer-neutral although it cannot be regarded as free money. The Bill provides that the cost of engaging service providers such as Pobal to administer the application process will be met from the fund while the normal administration costs incurred by the relevant Departments will be met from within existing budgets. I have no plans other than to continue with Pobal as the source of administration of these funds and funds from various other Departments.

Modest annual savings, currently of approximately €120,000, will accrue from the dissolution of the board but the administration costs associated with processing applications will be significantly greater, as I stated earlier.

Pending disbursement, moneys in the dormant accounts fund are managed by the National Treasury Management Agency. The NTMA had €132 million under management at the end of 2010 and some €39 million was transferred to the fund in 2010, while €20 million of previously dormant funds were reclaimed. Disbursements from the fund amounted to €20 million in 2010. I have already indicated the total amount disbursed since its establishment in April 2003 up to the end of August 2011.

The board's function is largely historical in 2011 and this is why we are bringing forward the legislation. There is a requirement to draw up a three year plan upon which detailed disbursement measures and programmes are based and to prepare an annual report that must be laid before the Houses of the Oireachtas and one has 21 days to challenge it there. The annual report and the review relate to earlier rounds of funding when more funding was available.

In summary, the legislation provides for the transfer to my Department of the function of the Dormant Accounts Board, which will continue to be accountable until the point of its dissolution. There is no change to the themes under which the disbursements can be made, namely, economic and social disadvantage, educational disadvantage and disability. Disbursements will have regard to these three themes and take account of the policies and priorities of the Government, availability of moneys, cost effectiveness of the expenditure and outcome of any previous reviews. Action plans must be prepared in consultation with the relevant Ministers and laid before the Oireachtas for a period of 21 days. This addresses a point made by Senator Cullinane. It should also be noted that the relevant joint committee of the Oireachtas already has separate powers to require me to appear before it in relation to any matter under my remit, including dormant accounts. The expenditure will also be subject to normal scrutiny by the Comptroller and Auditor General and Committee of Public Accounts.

I thank Senators for their contributions and support for the legislation, the purpose of which is to do nothing more or less than tidy up matters to take account of the level of funding currently available in the dormant accounts fund relative to the significant amount of money that has been in the fund heretofore. The transparent and open arrangements outlined in the legislation will reassure Senators that the mechanism for the disbursement of funds from this source of moneys will be accountable and transparent.