Ms Clare McGrath:

I am joined here today by Mr. Michael Long, the accountant for the Office of Public Works, and Mr. Tony Smyth, the director of engineering.

I am pleased to be here today to assist in the committee's deliberations on this pilot exercise undertaking a mid-year review of the position on outputs and expenditure, brief the committee on the OPW's emerging position on the Estimate and comment on the performance data presented in the Revised Estimates for the Office of Public Works.

Before I present the challenges that we face in demonstrating performance on the main programmes, I will brief the committee on progress to date in 2015. In terms of outputs, progress on the flood risk management programme has been hampered by a number of factors such as legal challenges within the procurement process and legislative requirements relating to environmental impact analyses of schemes. These unavoidable difficulties result in a long lead-in time in bringing these complex infrastructure projects to commencement stage. As a consequence, there are challenges in accurately identifying programme milestones in terms of output and expenditure where external factors can have a significant impact. The committee will be aware that I have presented these difficulties here previously.

While the OPW has made every effort to advance the schemes planned for commencement and completion in 2015, specific difficulties have been encountered and have led to delays. For example, the design of some schemes had to be revisited and required further consultation with stakeholders following the exhibition stage, a stage at which we conduct extensive public consultation. In addition, despite robust planning and contract management, one project encountered procurement challenges, which resulted in the procurement process having to be terminated and restarted. These issues have impacted on the Vote from both an output and expenditure perspective.

In expenditure terms, the OPW Vote spend is split between two programme areas. Overall, €397 million was allocated to the OPW in 2015, and expenditure at mid-year was 47% of the gross current allocation and 31% of the capital allocation. Current expenditure is on profile to break even for 2015 and while capital expenditure on one programme is behind profile, significant expenditure relating to major capital contracts is projected for the final quarter.

We have indicated to the Department of Public Expenditure and Reform that an application to vire funding between subheads may be submitted this year and a carry-forward of capital savings to 2016 sought under the deferred surrender scheme, within the 10% saving permitted. While the scale and composition of the 2016 OPW Vote is currently under consideration, the current expenditure ceiling for the Office is €276.5 million, which is in line with the current allocation for 2015.

The 2016 ceiling will allow for the existing level of service to be maintained in property management, heritage services and drainage maintenance, with an increase in the provision on property maintenance for buildings occupied by Departments to be funded from within the Vote. A reduced requirement on unitary payments for the convention centre in Dublin will allow funds to be redirected to the essential planned preventative maintenance programme now that we have assumed, since 2013, overall responsibility for this function.

While the capital allocation in 2016 will remain constant, the Government has demonstrated its commitment, announced yesterday, to flood risk management in Ireland with the announcement of a €430 million six-year programme of capital investment on flood defence measures as part of the Government's overall Capital Investment Plan 2016-2021. The programme will build on the very significant investment that has already been undertaken in flood relief works throughout the country over the past 20 years, with over €410 million invested in that period.

In 2016, schemes will get under way in Bandon, Skibbereen, Clashaboy, Douglas, Blackpool, Claregalway, Lower Morrell, Ennis south and Foynes on a staged basis. In 2016, reductions in capital unitary payments will allow for an increased investment in the ongoing office rationalisation programme. This will ensure the State rental bill can be maintained at a sustainable level and accommodation for essential State services can be provided in a cost-effective manner.

In terms of output measures, I am of the opinion that the OPW targets used in previous years may now need to be revisited. I am open to applying the principles drawn from the guidance issued by the New Zealand Comptroller and Auditor General to improve the performance information in the Estimates. I would welcome the views of members on the type of performance data they wish to see presented. I acknowledge that the Department of Public Expenditure and Reform, as the publisher of the revised Estimate, will have a key role in agreeing any proposed changes.

As members are aware, the OPW is responsible for a wide variety of functions broadly based in two areas of responsibility: flood risk management and estate portfolio management, which includes heritage services. I will address the challenges faced in demonstrating output within those programmes. Members are aware that the OPW is the lead agency for the management of the flood risk management programme in Ireland. The key purpose of this programme is to ensure the risks associated with flooding and the impacts identified in climate change are considered and appropriate mitigation plans are put in place. The overall outcome is to reduce the risk of flooding to homes and businesses and to ensure appropriate flood risk information for planning in Ireland.

The setting of performance targets and interim goals to measure this presents its own challenges. The OPW currently publishes output indicators on irelandstat.gov.ie. I suggest to members that these indicators might represent a more appropriate way to measure the performance of current flood relief schemes and the impending catchment flood risk assessment and management programme. On irelandstat.gov.ie, we publish the number of additional properties benefiting from flood relief works in a given year and the cumulative number of properties benefiting from flood relief works. We are incrementally demonstrating what is being achieved. The value of benefit to properties, or damage or loss avoided in financial terms, is also represented, as is the cumulative value of benefit to properties, or damage or loss avoided in financial terms.

In order to implement the State’s strategy for flood risk management in Ireland, we have developed a catchment flood risk assessment and management plan, known as CFRAM. This programme represents a major advance in the way that the management of flood risk is approached, involving a move to strategic planning at the river catchment level. It establishes a new framework for the proactive development and planning of flood relief schemes and other measures by applying international best practice. CFRAM lies at the core of the assessment. It is focused on 300 areas of potentially significant risk, known as areas for further assessment. The ongoing programme will look at all possible options to address flood risk in each area for further assessment for inclusion in the flood risk management plans. This programme, which has been allocated additional funding from 2018, will set out a medium to long-term strategy and will prioritise a programme of work with appropriate output measures to achieve the effective and sustainable management of flood risk.

I will set out the progress that has been made on the programme to date. Draft maps were completed for 282 areas for further assessment by the end of 2014 and for all 300 areas by June 2015. Over 40,000 maps have been reviewed by the OPW and the local authorities and have been subject to public consultation. Under the EU floods directive, the flood risk management plans are due to be reported by March 2016. This deadline will not be met until the end of 2016 due to delays in producing the flood maps. It is worth noting that the capacity to deal with flood risk management has been enhanced in recent years through greater collaboration with local authorities, which act as the contracting authority for certain schemes and carry out some minor works projects funded by the OPW as long as the works meet strict cost-benefit criteria.

The other main programme for the office is estate portfolio management, which encompasses the management, maintenance and development of the State’s property portfolio in our care, including the conservation, protection and presentation of national monuments and national historic properties in State care. We have been tasked by the Government with rationalising the State's property portfolio to reflect the changing numbers across the Civil Service. Since 2008, the OPW has undertaken a major rationalisation programme that has resulted in the surrender of over 1.2 million sq. ft. of office accommodation and yielded a cumulative reduction of €111 million in rent on the OPW Vote. In that period, we have surrendered 276 leases with an annual rental yield of €34.7 million. Rent reductions have been negotiated on 121 leases, yielding an annual rental reduction of €8.59 million. The savings achieved and the reduction in the State property footprint are output measures reflecting the significant work undertaken by this office over the last five years. With rents now rising, particularly in Dublin, mounting challenges in the negotiation of rent reductions and the rationalisation of properties will need to be considered as part of the output measures to be set for 2016.

The objective of the property asset management delivery plan, which applies to all public property holders and not just the OPW, is to achieve a more strategic approach to the management of State property. It requires all State property holders to view public property from a State perspective rather than from the perspective of individual ownership, notwithstanding that ownership will remain the same. The plan sets out a series of actions aimed at improving the planning and management of the public service property portfolio though improved co-ordination, an increased capacity to benchmark building performance, standardised building measurement and the optimisation of the use of the Slate's property assets through asset-sharing and more streamlined processes. As part of the plan, State property holders have been tasked with verifying their property data and submitting the data to the State property register by the end of 2016. A network of property managers is to be established across public property holders and will be chaired by the OPW. The application of the ISEN standard for facilities management for measuring and analysing office space to OPW office accommodation is to be introduced on a phased basis over the next two to three years. A training model for public service staff is to be developed in the property asset management area by mid-2016. A programme of information workshops has commenced, with further roll-out to be agreed with the steering group on property asset management, which I chair.

Regarding the capacity of the OPW to carry out the necessary reforms in this area, we have engaged in a business transformation process for our estate portfolio function. We are taking a lead role in the property asset management delivery plan. By looking at ourselves from an external perspective, we aim to improve our processes to deliver better outcomes for our clients and structure the organisation in a way that supports the most effective delivery of outputs. The ambition is to increase overall efficiency, given the significant reduction in our staff resources, and to optimise the stewardship of the property assets entrusted to us. Good progress is being made in this regard. Priorities for improvement are emerging around supporting our clients, developing our programme and project management functions, enhancing our planning capability and using better information systems. We will make progress with all of these areas for improvement in the course of the work of the business transformation, which will run until the end of 2016. We will foster and support a culture of continuous improvement, with which further progress will be made in future years.

As part of our property portfolio, we are responsible for the ongoing management, conservation and protection of some 800 historic properties and national monuments sites. The policy for this area is vested in the Minister for Arts, Heritage and the Gaeltacht. We provide guide services to visitors at 70 sites nationwide, many of which attract a significant number of visitors and are key to contributing to Ireland’s cultural and heritage tourism. During 2014, admission numbers to OPW-guided sites reached 4.5 million, which represented an increase of 33% on 2010. From an output measurement perspective, we are faced with the challenge of balancing the needs of conservation, for which output is difficult to measure, with the strong desire to increase public access and visitor numbers. This challenge of balancing the demands of tourism arises where the visitor experience derives from the quality of what we are presenting, but that same quality can be affected by those visitors. The OPW has a number of internal measures in place to assess performance at visitor sites. Traditional measures include simple analyses of increasing or sustained site popularity by reference to overall visitor numbers. Similarly, customer feedback mechanisms such as customer comments and visitor books at sites are employed to capture the experience and the quality of the engagement. In this digital age, the OPW is mindful that social media mechanisms such as Facebook and Twitter provide immediate and powerful feedback on the visitor experience.

I am sure members saw recently that of the top ten visitor attractions in Ireland recommended by TripAdvisor, four are managed by the Office of Public Works. That demonstrates the value that these and all heritage sites bring to the tourism sector.

With regard to additional functions performed by the office, which are not reflected directly in the Vote, client services performed on an agency basis consume staff resources and were therefore included in the performance measures in past Estimates. For example, the roll-out of the Intreo offices across the country that provide one-stop-shops to perform functions previously offered by separate social welfare, community welfare and FÁS offices have been successfully delivered to the Department of Social Protection within a very ambitious timeframe. Similarly, the construction and fit-out of seven primary schools were delivered to the Department of Education and Skills during 2014 and 2015 with a further eight schools in train. I would suggest that the work and commitment in the delivery of this accommodation, albeit funded from the Votes of other Departments, needs to be reflected with the OPW output measures, and I would welcome the input of members as to how this might be reflected in Estimates.

In general terms, I welcome the review of the performance measures and its consideration by the committee. My officials and I have committed to work with the committee and the secretariat to review the current output measures in order to produce outward facing indicators that are of relevance to the public and, importantly, can demonstrate clearly the considerable work being carried out by the office and value being achieved for invested funds.

It is worth bearing in mind, however, that the illustration of progress towards what is trying to be achieved is also important. While I accept that output performance measures should not relate to internal processes, events or milestones, these can usefully demonstrate the progress being achieved in reaching targets. The outputs from the OPW are in part processes for other Departments, giving rise to outputs or outcomes for their service users and for the public.

In regard to the published output measures, we are not going to be able to address every area immediately but we would expect to consider all the measures in each area over the next number of Estimates. These are just a summary of the key issues facing the office and I welcome any suggestions, comments or engagement with the members on these priorities and how we can improve the presentation of targets in order to assist the committee in its deliberations.