Mr. Seamus McCarthy:

The appropriation account for Justice and Equality recorded gross expenditure of just over €363 million in 2014. Salaries accounted for 35% of the expenditure. At the end of the year, just under 2,300 whole-time equivalent staff were employed in the Department and its related offices. As well as the administrative costs of the Department, expenditure was incurred on a wide range of services including naturalisation and immigration services, asylum seeker accommodation, legal aid; the Irish Youth Justice Service; the Probation Service, the Legal Aid Board and the Magdalen compensation fund. The Vote also includes funding for a range of statutory services operating under the aegis of the Department, including the Office of the Data Protection Commissioner, the Criminal Assets Bureau and the Garda Síochána Ombudsman Commission.

The appropriation account for prisons recorded gross expenditure of €335 million in 2014. The expenditure was incurred under one programme, the administration and provision of safe, secure, humane and rehabilitative custody for people who are sent to prison. Much of the programme expenditure related to payment of salaries, wages and allowances totalling €237 million. In addition, the prison service spent just under €50 million in 2014 on buildings and equipment and €28 million on prison services.

Chapter 9 of the report on the accounts of the public services 2014 concerns the development of prison accommodation in Dublin. The report reviews the current status of and expenditure on a project at Thornton in north county Dublin which aimed to develop new prison accommodation on a greenfield site. The project commenced with the purchase of a 150 acre site at Thornton for €29.9 million in January 2005. The site was to be used to build a new prison to replace the Mountjoy complex. Adjacent land totalling just under 15 acres was subsequently purchased in 2007, at a cost of a further €2.1 million. At the time the site purchase was approved by Government, it was stated that an indicative construction cost for the new prison complex to accommodate around 1,000 prisoners could be in the region of €150 million. It was expected that, in time, this cost would be partially offset by the proceeds of the sale of Shanganagh Castle prison and of the Mountjoy site and reduced prison operating costs.

In 2006, a proposal was developed for a significantly expanded scope for the new prison. The proposed wider project, with a capital cost estimated at €525 million, was to be developed under a public private partnership, PPP, arrangement. Following the financial crisis, PPP projects in Ireland effectively became unbankable and the option of direct State development of the proposed prison was considered. However, this was subsequently deemed to be unaffordable and the project was suspended.

When it became clear that the Thornton project was unlikely to proceed in the foreseeable future, development work was undertaken instead on the prison accommodation at Mountjoy to deal with the problems there - in particular, overcrowding, the elimination of slopping out and security issues. From 2010 to 2014, €28.7 million was spent on capital works on the Mountjoy site. Additional accommodation was built at the existing Midlands Prison to house 300 prisoners, at a cost of some €25 million. As a result, many of the problems at the Mountjoy complex have been fully addressed, at a much lower cost than was originally proposed to build a new prison on the Thornton site. My net conclusion is that the decision to acquire the Thornton site was underpinned by inadequate analysis of the likely costs of developing a new prison and the potential to deal cost effectively with the problems at Mountjoy by other means.

Since the acquisition of the land at Thornton, work on site preparation, and on off-site service works such as the provision of water, telecommunications and sewerage systems, has been undertaken. No prison building work has been undertaken. The cost of this work to May 2015, together with the site cost, was just over €50 million, and this is the carrying value of the assets on the appropriation account balance sheet. The prisons Vote appropriation account presents inconsistent valuations of prison land and buildings, with the property at Thornton being treated differently from similar property held by the Prison Service elsewhere. Relative to other similar property held, the property at Thornton is overvalued in the account.

The Prison Service has set up a working group to review the Thornton project and look at options which would yield the best possible value for the State in its future use. When my report was being completed, the working group was still reviewing the options. The Accounting Officer will be in a position to update the committee on the group's work.