Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

Property is the second highest administrative cost in the public service after pay and pensions. My office has been given the considerable task by the Government of rationalising the State's property portfolio so as to reduce that cost, as well as reflect the substantial fall in staffing numbers in the public service. The publication of the property asset management delivery plan, Accommodating Change – Measuring Success, in July last year was the culmination of the work led by the chairman of the Office of Public Works, OPW, Ms Clare McGrath, as the senior responsible owner in this area of property-related reform. I will shortly receive a report on the capacity of the OPW to deal with the new mandate given to it by the Government. What we are doing in the property space is genuinely reforming and new. By getting this right, big savings can be obtained for the taxpayer. This plan will challenge the silo mentality that has built up over many years. This new approach presents real opportunities for real savings by sharing assets, expertise and information across the public service.

From the State's perspective, we know office accommodation is one area where significant savings can be made. Ministers have already given their full commitment to ensuring their Departments and agencies co-operate fully. The plan will include setting targets for space allocation per full-time equivalent employee to be achieved by Departments. The drive to optimise office space will be enhanced and facilitated by statistical evidence setting out the full cost of accommodation borne by the State. The evidence will derive from the key performance indicators arising from the application of a standardised approach to facilities management to be adopted by public property managers. This will provide a basis on which to assess building performance and identify where improvements in space and energy efficiency can be achieved. In addition, a web-based mapping register of all State property is being developed for use by the public service as an information tool that will facilitate strategic decision-making.

On becoming Minister of State with responsibility for the OPW, a primary target of mine was to reduce rental payments for Civil Service accommodation below €100 million by 2015. I am glad to be able to inform the sub-committee that we are two years ahead of target, as last year the rent bill stood at €97.5 million. From a peak of €131 million in 2008 to a low of €97.5 million last year, progress is being made, as we are now back at 2002 levels of expenditure. Further progress can be made by adopting a whole-of-government approach. For the information of the sub-committee, of the 155 closed Garda stations, 40 are being sold, eight are being utilised by other State sector users and 13 have been handed over by way of a licence to community groups. This is an example of using surplus properties in a different way.

In the area of property maintenance, the OPW has assumed greater responsibility for the provision of this shared service for Departments. The funding and works relating to building maintenance of State property to the value of almost €20 million transferred to the OPW in 2013 and are now managed and performed by it. For the first time, this allows the OPW to prioritise funding on a whole-of-government basis. It also allows it to initiate a planned preventive maintenance works programme which in the medium term will produce savings and, more importantly, better care for the fabric of the State's buildings and an enhanced working environment.

As a result of centralising this service, an estimated 100 staff in various Departments who were previously looking after maintenance transactions are now freed up for other duties in their specific Departments. In 2013, €19.5 million was expended on this work and the committee will see that a similar amount is available in 2014, of which €2 million is ring-fenced to accelerate a preventive maintenance works programme on State-owned buildings.

While these reform measures have been ongoing, it is worth stating staffing levels in the OPW have reduced dramatically, from an authorised number of 2,208 in 2008 to 1,620 in 2014, a reduction of 588 staff or about 25% over a six year period. We have fewer staff and a vastly reduced capital budget but have taken on new roles, as set out in my presentation, enhancing the existing shared service function traditionally performed by the OPW. It is also worth highlighting to the committee the scale of the reduction in our capital budget over the same six year period. When the unitary payment for the national convention centre is taken out, our total capital budget across all subheads is €80 million, down from €400 million in 2008, which is quite a reduction.

In difficult times, the OPW continues to demonstrate its commitment to training and work placement programmes. The graduate architect and engineer programmes enhance the professional development of graduates while making a significant contribution to the work of the office. In addition, placements under the JobBridge scheme are providing practical skills for participants to enhance their future employment prospects. I am pleased to inform the committee that after an absence of some years, this year the OPW will reintroduce the apprenticeship programme. Some 20 places will be offered on the programme in areas such as stonemasonry and craft carpentry.

On the last occasion Ireland held the EU Presidency in 2004, the total was €110 million. I am pleased to inform the committee that the total cost for last year came to €42 million. It is clear that the Government's decision to centralise all conferences and events, some 245 in total, made a big difference in reducing costs. Dublin Castle and other historical properties under the care of the OPW, allied with the centralised event management service directed by the OPW, greatly helped in organising a very cost effective Presidency last year. The new state-of-the-art conference facility in Dublin Castle is a tremendous asset for future events and conferences that the State needs.

In respect of the 2014 Estimates before the committee, the OPW has responsibility for two main programmes within Vote 13 - flood risk management and estate portfolio management. The National Procurement Service has been transferred to the Office of Government Procurement and has already been reviewed by the committee under Vote 41.

In respect of flood risk management, one of the areas to which I have not yet referred is crucial to the life of the country. I would like to address briefly the matter of the severe storms in the Christmas and new year period and the resulting serious damage caused to public infrastructure. Initial estimates of the cost of the clean-up and the repair and restoration of public infrastructure were provided for the Government and are of the order of €65 million. Some €41 million, almost two thirds of the total estimate of €65 million, arises in the case of two counties, Clare and Galway, reflecting the severe impact of the storms along the west coast. Local co-ordination and delivery of clean-up and restoration works are being led by the local authorities. All Members of the Oireachtas owe a great debt of gratitude to our colleagues in local authorities who have been through a very difficult number of weeks given the scale of the storms, particularly in the west. We also owe a debt of gratitude to the emergency services and all those working day and night in very difficult circumstances. The OPW has responsibility for flood relief and written to every local authority to state we will receive applications for funding to assist them in their work to repair the damage to coastal flood protection structures.

Since 2009, the OPW has provided €23.8 million in funding for local authorities to carry out minor work schemes - schemes under €500,000. The partnerships established with the local authorities and the funding provided for them are a key element in maximising the capacity of the overall programme, with approximately 1,230 projects having been completed to date under the scheme.

Expenditure on capital flood relief works has been increased in recent years and we are now reaping the benefit of that investment in Dublin and towns such as Clonmel, Kilkenny, Mallow and Fermoy where schemes have been or are being carried out. Nine major flood relief schemes were completed in the past two years under the major capital programme in places such as Carlow, Clonmel, Mallow, Tullamore and Dublin on the River Dodder, a tidal scheme. This year will see the commencement of a further six major schemes at Templemore, Claregalway, Bandon, Skibbereen, Bray and south Dublin, with scheme completions at Fermoy, Ennis, Waterford and on the River Wad. Almost €370 million has been invested from 1995 to date in flood risk management measures which have protected 10,500 properties and delivered benefits estimated at over €1 billion in terms of damage and losses avoided. This is a very significant achievement by any measure.

The Government has committed €45 million per annum for flood risk management and mitigation measures for the period 2012-16 under its medium-term capital investment programme. Despite the fall-off in capital expenditure elsewhere, the OPW has prioritised this area of spending and an amount in the order of €100 million has been spent in 2012 and 2013, with the use of other savings achieved under the OPW Vote. A total of €45 million in capital expenditure has again been allocated in 2014. We have to prioritise our spending to make sure that on cost benefit grounds, the funding solves the problem for the greatest number of people, communities and businesses up and down the country.

On coastal erosion, an issue that has been brought to attention by many colleagues recently, we have to take a much more holistic view. Coastal erosion is a natural occurrence and we have to make sure in our planning and development that we do not repeat the mistakes made in the past and allow development in areas at risk of erosion. It is also worth noting that, in tandem with the management of flood risk, this investment programme is heavily labour-intensive and the investment will continue in future years to sustain significant employment numbers. Based on a Department of Finance report on labour intensity and infrastructure investment, it is estimated that the amount of money expended on flood relief activities has sustained up to 700 direct jobs and 300 indirect jobs in the past two years. These are all private sector jobs because the contracts are tendered for by the local authorities in the case of the minor works scheme.

The estate portfolio management programme is the other big aspect of the Vote and the largest of the two programmes, with an allocation of €312 million. This programme has many distinct parts, including €98 million for rental payments and €50 million for the maintenance spend to which I have referred.

Another significant part of the programme is heritage services involving the management of 760 national monuments and 30 national historic properties, with a combined provision of 70 visitor facilities. We need to do things differently in the heritage space. Since taking office, I have got a communities initiative scheme up and running. While 20 projects have community involvement, there is potential for many more. The First Free Wednesday of the Month initiative which I launched two years ago has helped to open up more of our great historical sites to the public and visitor numbers are up 6% year on year. I recently looked for interest in the private sector to see if we could enter partnerships on our existing sites which might improve footfall, while increasing employment opportunities. We received over 42 expressions of interest, with 13 serious proposals which are being considered by the OPW. I will soon launch a new scheme to allow members of the public to use designated historical sites for civil ceremonies. I secured agreement with the Department of Public Expenditure and Reform to reinvest additional receipts generated by the heritage services in the OPW. As an initial step, an additional €348,000 was generated in 2013 and provisionally allocated to the OPW in the Revised Estimates for 2014 to allow it to be reinvested in the heritage portfolio.

This money will go to areas in most need and, importantly, where capacity has been identified to generate increased business and receipts. The direct reinvestment of surplus receipts will create a strong incentive to increase activity at heritage sites and improve business opportunities.

Before I take questions, I remind members that the OPW also manages a range of services not funded directly from Vote 13. In 2013 it incurred expenditure on behalf of other Departments and State agencies amounting to €68 million. The main areas of expenditure were the urgent provision of schools for the Department of Education and Skills, the Irish Youth Justice Service facilities in Oberstown, the delivery of the Intreo programme for the Department of Social Protection and the leasing of accommodation on a repayment basis for numerous clients. As an organisation, we provide building, procurement and project management advice and assistance for Departments and State agencies.

I hope I have given a fair summation of our work. I am happy to take questions from members of the committee.