Oireachtas Joint and Select Committees
Wednesday, 17 October 2012
Joint Oireachtas Committee on Finance, Public Expenditure and Reform
2013 Allocations for Public Expenditure - Office of Public Works: Discussion with Minister of State
We will proceed to No. 7 on the agenda, the 2013 allocations for public expenditure, Vote 13 - Office of Public Works. I welcome the Minister of State at the Department of Finance and at the Department of Public Expenditure and Reform, Deputy Brian Hayes. A briefing paper has been prepared for members as part of today's presentation. I remind members, witnesses and people in the Visitors Gallery that mobile telephones must be switched off.
Members and the Minister are reminded of the long-standing ruling of the Chair to the effect that members should not comment upon, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
Is it agreed that the Minister's opening statement will be published? Agreed.
I congratulate you, Chairman, on your recent appointment as Chairman of this committee. I and the officials in the Office of Public Works had a very good working relationship with your predecessor, and we look forward to having the same relationship with you and other members of the committee when we appear before the committee. I wish you every success in the time ahead, Chairman.
I am pleased to be here today to present the primary aspects of the Office of Public Works spending plans under Vote 13 for 2013. The timing of my appearance today is significant in terms of the public service reform agenda and is of particular relevance in the Government's continuing effort to move to a new whole-of-year budgetary timetable. I understand that earlier today was the first time a Minister has appeared before this committee to discuss Estimates in advance of the detailed Estimates being formulated. I hope our engagement will provide an opportunity for this committee to make a more timely and effective contribution to resource allocation policy for all Departments and offices.
The critical point to make about the Office of Public Works, OPW, is that resources continue to be reduced. Gross funding on the OPW Vote has reduced from €635 million in 2008 to €324 million for 2013. The committee can see the extraordinary reduction in the Vote over a six year period, a relatively short time.
We have gone from 2,208 to 1,704 in terms of whole-time equivalents in the office so there has been in a diminution in the totality of the budget and in terms of the number of people working in the Office of Public Works.
To deal with this reality, the staff of this office have been actively engaged in the public sector reform process for some time now. The staff are endeavouring to successfully provide an enhanced level of services, not just the existing level, with less money and less people across a broader section of responsibilities. Indeed, it is important to also note that €324 million does not encompass the full range of services provided by the office as many are on an agency basis which are not reflected on the OPW Vote. Frequently the Office of Public Works provides a service for other Departments, which is part of our remit and we accept that, but it is not reflected in the totality of the budget because although we are doing work for the other Departments, they are effectively not paying for it; the OPW pays for it through its Vote. Years before people talked about the importance of a shared service, the OPW was providing such a service in Government, working across the entire sector. That is why it is not reflected in the Votes of other Departments.
Transformation of how services are provided is well under way in OPW and is key to the office achieving the high level objectives set out in the OPW statement of strategy. OPW funding will continue to be allocated through the Estimate process to the areas where the demand can be supported by clear performance indicators which demonstrate unambiguous delivery of objectives. The reforms are widespread throughout the organisation and are particularly transformational in the procurement and property areas. The senior responsible owners for managing the change in these areas are based within OPW and while they are well aware of the magnitude of the task ahead of them, they are meeting the challenges arising head on.
I will now deal with the specific technical adjustments amounting to €6.4 million for the OPW Vote highlighted to the committee members today. The OPW adjustment has assumed responsibility for the unallocated reduction of €3.7 million for the PER group set out in the comprehensive expenditure review. The main area OPW outlined for savings is rents paid on behalf of Government Departments. This expenditure has been reduced from a high of €131 million in 2009 to €112 million in 2012 and will see a further reduction of €3.7 million in 2013 achievable through an ambitious office rationalisation programme which saw the surrender of half a million square feet of office accommodation in recent years.
The savings made are not once-off figures, they are annual savings that, over time, will significantly reduce the annual State rental expenditure but, critically, are dependent on up-front capital investment for fit out or dilapidation costs which inevitably arise as part of the rationalisation programme. This level of progress will be difficult to maintain but I am fully committed to reducing State rents to below €100 million by 2015.
That is achievable, even after the extraordinary success of recent years. To do this, I will shortly bring proposals to Government that will further develop and change in how property is managed within the Civil Service. This will involve the greater use of open plan accommodation, more efficient use of office accommodation and greater energy conservation. These measures will yield further significant reductions in the cost of accommodation and will provide for the more efficient sharing of property assets across the public service.
The office is also in the process of disposing of assets that are surplus to requirements. This disposal programme will involve a number of approaches, such as transferring assets to other State bodies that have specific requirements, for example, community care facilities, disposal on the open market or use by communities, such as the recent provision of the former Finglas Garda station to a community crèche. As gardaí get out of Garda stations and we rationalise office space and introduce more shared services, there are big opportunities to sell of those buildings if there is a market for them or to tie them in with other Departments, such as primary health care and community facilities. We gave Finglas Garda station to a community child care facility. We must think outside the box and be radical in how we utilise public buildings. We have been given the opportunity because the public sector is shrinking and rationalisation and shared services are in place to provide that additional office accommodation for other uses.
On the other Vote adjustments, the office continues to remain well within the requirements set by Government under the employment control framework and will meet a funding reduction of over €1 million in 2013. The remaining reductions outlined to the committee are for administrative savings this year and the 2012 requirements for the EU Presidency. While there will be further requirements for the EU Presidency in 2013, the Government has ring-fenced separate funding to meet these costs. In the event the OPW achieves administrative savings on the 2012 current allocation, an application will be made similar to the €588,000 carried into this year, to supplement the 2013 allocation.
On the capital side, an allocation of €333 million was made to OPW in 2008. The 2013 allocation is provisionally set by Government at €100 million in 2013. That is an extraordinary reduction in the amounts available for capital projects.
Contractual commitments in 2013 already in place amount to66% of the €100 million, with flood risk management and unitary payments on the Dublin Convention Centre accounting for €65 million before we look at the 2,200 properties in OPW care. Priority projects on this portfolio of buildings with a gross value in excess of €60 million are underway or being advanced.
I hope it has been made clear to the committee that for the OPW to continue to carry out its core functions and objectives, the annual resources allocated to the office are the minimum required in 2013 but with that allocation, the staff of the office will continue to reform and reinvent how it provides its services so it can continue to provide more for less.
I thank the committee for its attention and I welcome any questions, particularly if any members have any views or alternative suggestions. We have set out where we see the reductions for next year. I invite the committee to submit any other suggestions they would like to bring to the table and we will be happy to consider them.
I thank the Minister of State for giving us that overall view of the situation as we commence the Estimates process for next year. There is no point talking about specific budgetary lines because we know decisions must be made on policy for next year.
There are two ways to look at the Minister of State's statement. It was given in a nice, flowery manner but there should be a harsh analysis of the figures he read out. I will do nothing except put the figures the Minister of State outlined back to him.
He said that a couple of years ago there were 2,208 staff in the OPW and that it was carrying out work worth €330 million. On average the amount of work in the capital budget per staff member was €166,000. Now the budget for next year will be €100 million and staffing levels will be 1,700 people. That gives an average amount of work on the capital side per staff member of €58,000.
There has been a reduction by two thirds in the amount of money spent on capital projects but the number of staff has been reduced by 20%. Let me repeat the output of work on the capital side has been reduce by probably 70%. The Minister supplied the figures. The figure was €330 million in a previous year and that will be reduced to €100 million in 2015. The amount of work done on the capital side per staff member has been reduced from €166,000 to €58,000 per person. From the way the Minister presents this information, one would almost think it was an achievement.
Let me help the Deputy. If what he states is true and his figures are correct, he is right in pointing to an appalling vista. Deputy Fleming's figures are wrong and this arises from a fundamental misunderstanding as to the what the figures represent. When he read out the figures on capital for 2008, the Deputy made the assumption that this was money that was spent in the Office of Public Works by the staff in place, when it is not.
The great majority of that capital works was contracted out. To extrapolate to a unitary cost where one can divide the capital budget by the number of people in the office is what may be described as "Voodoo economics".
This is similar to the local authority telling me that we had 100 staff, the work was all motorway projects and the amount of work being done is down by 70% but it still has 85% of its staff. One can talk about the projects being subcontracted out. Estimates should be about the outcome and outputs. The outputs have been seriously diminished but the staff number have not been reduced to the same extent. I am not suggesting the Minister of State can do that. My point is that there is another way of analysing the figures than the way the Minister of State presented them. It is an alternative analysis.
No. It is a valid perspective. I understand that the work is sub-contracted out.
I wish to raise the rent roll. In the course of the statement, the Minister of State stated that rent had been reduced from €131 million in 2009 to €112 million and that he hopes to have the figure reduced by another €3 million-----
Exactly. That sounds good but let me drill into the Minister's figures. Reducing the figure from €131 million to €100 million would be a saving of more than 30%. The numbers employed in the public service during that period will have been reduced from 320,000 to 282,000 and we are well on the road to achieving that, which is a reduction of 12%. As there is 12% fewer staff in the system, our requirement for accommodation should be reduced by 12%. Reducing the accommodation bill of €131 million by 12% would bring the figure down to €116 million. Therefore, 12% of the reduced bill for accommodation is due to a reduction in the number of public servants and the balance is due to rent reduction. I compliment the Minister of State on that.
Yet NAMA, the largest property management company in the country has only achieved an average of 14% rent reduction in the years from 2009 to 2015. It would be better to employ community welfare officers who have succeeded in cutting the rent supplement to a greater extent.
The Minister represents a busy constituency and is well aware the community welfare officer tells the landlords to cut the rent. If he were told the cuts in individual rent supplement payments were 14% during the five year period, he would say it was not good enough. Yet the figures supplied by the Minister of State translate into a 30% reduction but half of the reduction is attributable to the 12% fewer staff. On analysis, the figures are not half as rosy as he pretends they are.
Once again Chairman, this is a misunderstanding. The 320,00 staff figures to which my good friend, Deputy Fleming referred, are the totality of numbers in the public sector. We only pay the rent bill for the civil servants.
It all depends on when one takes a lease. One may have taken a lease on a property for ten or 20 years, and that still stands irrespective of the state of the economy. I have figures that show the actual average cost of what we have negotiated against the market price. Let me illustrate this point. The average cost per square metre that we have negotiated is €409. The market average cost is €675. Let us take the cost per square metre in Dublin, where we have negotiated leases at €289 per sq. m compared to the average of €344 per sq. m Of course, we should be able to negotiate a lower price, because we are the biggest player in the business. We are the people who should be looking for break clauses and should be getting out of leases, and we are. Deputy Fleming made some very positive comments on NAMA during a previous committee meeting, on which I followed up earnestly. We are aggressively in the market and are getting out of leases. The new public sector will no longer be taking out long-term leases because we have fewer numbers. As one would expect because of our clout, we are way ahead of the market in terms of what we negotiated because we have the power to do that in many towns, such as the Deputy's town of Portlaoise, where we are by far we are the biggest player. If we were not there, then there would be no Portlaoise, which would be terrible.
A very aggressive strategy has been deployed by our property people. We can do even better than that. The way in which we can do better is to be given the directive role, which as I said, will be covered in the proposal we will bring to Cabinet in a matter of weeks. That will give this office a much greater responsibility in putting pressure on Departments to move. I think I described it previously to the Deputy as a gigantic chess board which the Office of Public Works has to negotiate. It is not just about moving one group of staff from A to B. There are consequences in terms of the numbers involved, the fit-out that is required and whether one has the capital investment to do it. Those aspects of property management will be accelerated with the new power we will be given under the property memo. The success that we have experienced in recent years in negotiating lower rents is manifest. However, Deputy Fleming wants more and if I was on the other side of the House I would have the same questions. I will be able to report even further progress next year when we have been given the new powers in office to manage the property portfolio in a more efficient way than it is currently.
I am always supportive of the OPW and the staff know that but I have to look at the figures from a different perspective. I understand the Minister of State has achieved a rent reduction in the case of a break clause and he was able to renegotiate the lease. What we would really like to know is the value of the rent roll that did not come up for rent review. It is great to get a 50% reduction in the lease on some of the properties but what about the rent on properties where the OPW will pay the same rent next year as was being paid three years ago? It has not come up for rent review. I know the Minister may not have that information with him. The Minister has been cherry picking the excellent cases where he has achieved a good reduction when the lease was up for review. From the totality of the rented properties, what percentage came up for a rent review and what percentage of property is well protected and has experienced no reduction in rent?
The Minister is getting great reductions in some areas, but it is possible he is getting little or no reductions in many other areas.
I do. The OPW uses approximately 2,200 properties. It owns 60% of them and leases 40% of them, roughly speaking. Obviously, the owned estate is the great asset we have. We are engaged in intensive negotiations regarding the 40% of properties that are leased. We have absolutely no difficulty providing further information to the Deputy and the committee.
It seems the Minister of State's officials deserve to be congratulated on achieving an extraordinary reduction in expenditure, one hopes at minimum risk to the country. I would like to get the Minister of State's help with some numbers. In his opening statement, he said the OPW will receive €324 million in funding in 2013. According to a table in the document given to the committee, the OPW is being given €375 million under Vote 13. I am sure I am missing something. Can the Minister of State account for the additional €50 million?
I thank the Minister of State. That seems like a small percentage. As I do not have the context for the OPW, I ask the Minister of State to take my comments for what they are. If a struggling organisation is essentially insolvent, it should be fighting for its life by cutting costs everywhere. I am not saying there is not a good reason for the 1.4% figure. I just want to question it because it seems low. Could the Minister of State explain why it is so low?
As a matter of interest, does the OPW have any plans for what it will do with all the council buildings that will be freed up from 2014, according to the plans announced yesterday by the Minister of State's colleague? There is a very nice building in Greystones.
The OPW has dealt with a massive reduction in staff. Essentially, its number of staff has decreased from 2,200 to 1,700. The number of full-time equivalent posts is 500 less than it was in 2008. It has also had to cope with a massive reduction in money. What has this country lost as a result of that?
No, I am asking about what has generally been lost under the OPW's remit. It has lost a sizeable number of staff and its funding has been reduced massively. Can the Minister of State tell the committee what has been lost as a result of that? Obviously, the OPW has important responsibilities in areas like risk management. What risks are being posed to the country, in the opinion of the Minister of State, as a result of the ongoing massive reductions in staff and funding? I refer both to short-term risks and potential long-term risks.
Like others, I welcome this fantastic process. As I said earlier to the Minister, Deputy Noonan, best international practice is for parliamentary committees to get the draft budget three months before budget day. I ask the Minister of State to try to ensure that happens next year. I do not know whether the committee will make a formal request to that effect. I welcome this process as a great step, but I would like the Government to consider moving towards international best practice next year. I know it is a huge amount to ask. It might take a few years.
I thank Deputy Donnelly for his kind remarks about my colleagues in the OPW. I can state bluntly that the radical reductions occurred in recent years. The organisation is at its lowest point in terms of numbers for a very long time. People are having to do things differently. I will give an example. The OPW provides architectural help and support to the Department of Education and Skills with regard to the provision of new school buildings. It can be argued that the OPW should have been doing that before now. All of that work used to be done by the private sector. Given that the OPW's architects are not as busy with capital projects as they used to be - the funds are not there - it is understandable that the OPW has been asked to assume responsibility for this. It is one example of how the OPW is doing things differently.
I will give a second example. The OPW's owned estate comprises approximately 60% of the 2,200 buildings it uses. It is possible that more should have been done in recent years to audit those buildings in terms of thermal efficiency. Many old and significant buildings should have been adapted for these purposes. That work is having to be done now. A great deal of the direct labour that used to be done by the building maintenance service is now being outsourced to contractors because of the squeeze that is on. The Deputy was right to mention that the reduction in the coming year will be just 1.4%, but he needs to have regard to the enormous reductions of recent years. We are at the bones of the organisation. If we start to take more people away, we will have to question whether the OPW can continue to perform the key roles it is asked to perform.
Most of those who work in the OPW are industrial staff. They work on the ground in our communities every day, in line with the functions given to them by the State. The OPW has 1,200 industrial staff and approximately 500 civil servants. It is not a traditional organisation like the individual Departments. The majority of OPW workers are industrial staff. Some members of the committee might be aware that I have tried to recruit volunteers to help us to present our heritage sites. Approximately 30 pilot projects involving community groups have been rolled out this year at local heritage sites. The volunteers are helping us to present our sites and offer additional value. We are working with local communities to try to reinvent the organisation.
Deputy Donnelly asked about the future of council buildings following the decision announced by the Minister, Deputy Hogan, yesterday. It is a crucial question. When I go around the country, I see many brand spanking new buildings with no one in them. The level of economic activity has brought them into question. We have responsibility for central government rather than local government. There is a very strong argument for a property management section within central government to have a remit across the public sector. That is the space we are moving into. I said something similar in response to a question asked by Deputy Fleming earlier. Not only do we have to ensure the function is co-ordinated by central government, but we also have to go further by examining whether better uses can be found for all the public buildings that exist. Many buildings will be freed up as a result of the decision that was announced yesterday.
The Deputy also asked what we would lose in the event of further cuts. I am very proud that we have managed to ring-fence certain areas, such as flood relief, when cuts have had to be made. Today's floods in Cork and elsewhere have reminded us of the importance of continuing to roll out capital funds in this regard. I made a significant announcement that funds will be made available over the next two years for a project in Bray, which is in the Deputy's constituency. At a time when capital expenditure is being reduced, it is important for this country to continue to invest in flood relief. Flooding is a major problem, especially in light of the global warming issue. We have been able to ring-fence that. It could be argued that further budgetary cuts would lead to the closure of heritage buildings or the withdrawal of some of the guides who show the public around. We are not at that stage yet. Workers across the OPW have bought into the changes that have been made within the organisation and agreed to deliver services in a much more efficient way. I thank them for their forbearance in that regard.
I do not disagree with what Deputy Donnelly said about the three month budget window. I think it would be a good thing. However, it is not a decision to be taken at my pay grade.
I asked the Minister of State whether there are any serious risks. I take his point about flood management and welcome what he had to say in that regard. If a new comprehensive expenditure report required the OPW to reduce its numbers by a further 5%, would that present any risks?
I guess the Minister of State has outlined one, potentially to heritage buildings, which has a knock-on effect on public value and tourism and other things. Is there anything within the current envelope of funding that would put some important national assets at risk?
In effect, the problem is that our organisation does much work for other Departments at an agency level. Those Departments could take a decision not to advance a project in which our architects and surveyors would be involved. Those decisions would rest within the other Departments as we do a good deal of work for those Departments. The key area of genuine risk would be if we were to stop rolling out schemes on flooding. So far we have managed to ring-fence that and I am confident that funding will be in place between now and 2015.
I welcome the Minister and his officials. Certainly it is a challenging environment. I wish to focus on one or two issues. The Minister mentioned his observations from driving around the county where he saw spanking new buildings, many of which are empty. My concern is with older buildings. In the context of local government reform it is possible there will be a substantial number of older buildings which have been in the care of the State in one form or another up to now which may be searching for a tenant. I am aware - I regret to say this - of many older buildings, some of which have fallen into a state of considerable disrepair, which have considerable heritage value and which under the law of the land, if in private ownership, would possibly be the subject of derelict site notices and compliance orders. There is a significant challenge for the OPW on how to aggressively pursue the various State agencies, Departments, fisheries and education agencies and the HSE, as their leases on premises expire or are reviewed to move these people into tenancies in these areas. Is the Department actively involved in compiling an inventory of these buildings and the guesstimate of the costs involved? There is one such building in Macroom, a former FCA premises, which is in a deplorable state of disrepair. It is a fine building in the centre of the town. That is just one example; I am sure the country is littered with similar type buildings. That is regrettable because such buildings are part of our built heritage and, notwithstanding the difficult times, there is a need to work as hard as possible to transfer tenancies into these buildings. After an old building has been vacated for six months and the heating has been turned off it falls into a state of considerable disrepair and dampness. If a building is vacated for six years, one has a real problem. Many of these buildings have been unoccupied for a long period. Most town councils around the country are probably housed in old Victorian era buildings which have found a useful way of contributing to the public good but, if vacated, would deteriorate significantly. That is an issue of which we need to be conscious and work aggressively to remedy.
The Minister referred to Finglas Garda station and a community crèche. There is much fear in rural areas, although not exclusively, in the context of community policing that there may be a further review of the Garda barrack network as to the likely sustainable number going forward. Given their low value, particularly in rural areas, closing and putting them up for sale will yield little if anything in the short term because there is no market to purchase many of those buildings for which the OPW is responsible. Perhaps the Minister would explore the option of making those facilities available to community organisations in order that they can be a fulcrum for delivering social welfare services, community welfare services, Teagasc services and, although in the current environment the Garda authorities may say it does not want the responsibility of maintaining these buildings, they would still be available to the local Garda for community alert meetings or to maintain a presence in an area. We have to think outside the box in finding new uses, working with local communities. Whether by lease or nominal lease arrangement that issue should be pursued.
I thank the Deputy for his remarks. The whole question of property management is a key part of the public sector reform programme, about which the Minister, Deputy Brendan Howlin, has spoken to this committee and the Committee of Public Accounts. We will be in a much better space when we get the memo through, which will help this organisation to move people around, with agreement, but in a way that maximises floor space. There is nothing as bad as going into a building that is heated and maintained with a floor unoccupied. At present people can move around willy nilly, with just two weeks advance notice, and move elsewhere but we have to pick up the pieces. I am being honest. That is not the way to run a property effectively. We need to have much greater control of property in working with the organisations. We have started the inventory process which was a key decision of the public sector reform plan. At first level it will be across Government and not only across each Department but each of the agencies within those Departments. We have a much better focus on where those buildings are located around the country and their condition. The Deputy is correct that the cost involved in maintaining these buildings and bringing them up to a standard is astronomical. In some cases one might argue that it might be easier to hand them to another organisation. It depends on what the organisation is but I accept many of the buildings are in strategic locations in towns throughout the country and we do not want to diminish that in any shape or form but we have got to manage it. The new tools we will be given under the public sector reform plan will greatly help us in that regard. Of course, we have very few new buildings. That is the reality of capital. It is about managing the resource we have and adapting that in a more clever way. Shared office space will be a key issue. Next year our organisation, working with the Department of Public Expenditure and Reform, will launch a new shared service facility in Clonskeagh for HR which will bring together 350 civil servants to deal with all HR transactions within the Civil Service. That is a building we custom made in an open plan office. If one comes to our head office in Trim, one will see an open plan office. As far as I am concerned that is the office of the future.
Sorry, it is HR, payroll, pensions and banking; the first four areas of shared service. The office of the future is the open plan office as one would see in any private sector entity. To do that, new buildings are needed and we need to move away from the obsession that some people have with cellular offices. Including Deputies, it might be a good idea if we all worked in a shared environment.
If one is on one's own one should get a cellular office. I have no difficulty with that. Maybe we would give the Deputy an old Garda station. The position about Garda stations is that 39 have been closed and come within our remit and we have to deal with that issue. I very much want community proposals as to how those facilities can be used. I have given the example of Finglas Garda station. The scouts from Rush came to see us recently We are handing over the old Garda station in Rush to them in due course.
We have a very open mind when it comes to utilising these spaces, once it is on the basis of some kind of management licence agreement. I agree there is not much of a market for them at the moment. Therefore, it would be better, in terms of lighting, heating and security to ensure we have a use for them, rather than board them up. I have a very open mind on that and if the Deputy has any ideas for his area, he should come to us with them.
I wish to raise one other matter before concluding. Before becoming a member of this committee, I was involved with the committee dealing with the environment. One of the concerns we dealt with recently concerned the geo-zoning of areas by insurance companies and the position where certain households, because they were in a particular zone, were unable to avail of flood or subsidence insurance and so on. A strange comment was made one afternoon by the representative of the Irish Insurance Federation indicating there is no clear correspondence with regard to insurance in areas where flood remediation measures have been carried out.
The Department and the Minister of State's predecessor spent significant sums of money in recent years on such works, yet households in those areas still have difficulty in obtaining household insurance. Also, the insurance companies continue to geo-zone those areas as places at risk. Perhaps it is not a function of this committee, but I would be grateful if it could examine the regulations with regard to how domestic or home insurance operates. I would be grateful too if the Minister of State could give some indication at a later date as to how the Department interfaces with the insurance industry with regard to works carried out by the Department.
My city was flooded this morning by a tidal flood. We rarely get fluvial floods, but we did a couple of years ago. A number of businesses are in difficulty currently due to the fact that some works are waiting to be done. These works are probably listed for completion in the next two to three years, but insurance companies just give a blanket refusal to requests for insurance by these businesses. If a guarantee was provided that the required works would be carried out over a one to two-year period, those companies might be able to get a particular type of insurance, with an excess in place. For example, a retailer might not be able to get insurance on the property for the two or three-years period while waiting for the work to be done, but should be able to have stock to hand insured. A further difficulty for such retailers now is that major suppliers, such as Musgraves, are questioning supplying stock to them because they feel the stock is not safe. This is a huge issue for businesses. For companies trading on a one-to-one basis, any difficulties with stock and cash flow will create a huge crisis.
I will make a brief comment on that. This is a big issue within the Department because, as the Chairman is aware, we are responsible for bringing forward major capital schemes on flood alleviation. This is a huge part of what we do, in conjunction with local authorities, which effectively become the funding agents, but we fund them on many schemes. We started a process of negotiation with the Irish Insurance Federation last year and talks are ongoing. It is a matter of great concern to me that we have not managed, thus far, to bring the discussions to a satisfactory conclusion. It is a disgrace that where the State spends significant sums of public moneys putting in flood alleviation measures to a standard for a flood event of one in 100 years -----
It is a very robust. It is up to international standard. It is a disgrace that those communities, businesses and homeowners then find insurance companies will not insure them. I have said this directly to the insurance companies.
The insurance companies need to understand the serious intent on our part to resolve this issue. They have claimed in the past that it is a lack of co-ordinating information from us to them which allows them not to provide -----
If I can interject. This is the sort of nonsense that goes on in this regard. A householder approached me recently with a letter from a specific insurance company. Two questions were asked of the householder in the letter, namely what specific measures the householder had carried out with regard to protecting the house with regard to further flooding - a reasonable question - but the second question asked the householder to inform the insurance company what works were done by the local authority in the general area with regard to flood measures. That is not something an insurance company should ask. I have the letter and could give the Minister of State a copy of it.
I will take up that letter with the Irish Insurance Federation. It makes the argument that it is not aware of huge numbers of people who cannot obtain insurance. However, everywhere I go, and Deputies who speak to me on this issue say, there are very clear cases where people cannot get insurance cover. We need to bring this issue to a conclusion. In September, we gave the federation the template upon which the information we gather is based, but we are still waiting for a reply. The Government does not have the power to demand that groups of companies such as this provide insurance cover, but we are running out of patience and I want to bring the issue to a conclusion one way or the other.
The level of testing being imposed on people, as referred to in letter to the Chairman, smacks of an attitude that must be countered. Members may be assured that I will do everything in my power to counter that. I am determined that where we bring an infrastructural project to design, planning and construction stage and prove that infrastructure will withstand significant flooding events, it should follow, as night follows day, that insurance should be provided. It is with regard to those cases that we need clarity.
On behalf of the committee, I would be interested in receiving any correspondence the Minister of State can send us with regard to progress with the Irish Insurance Federation. The Oireachtas Joint Committee on the Environment, Culture and the Gaeltacht is also engaging in a process with the federation.
I do not know if the Minister of State has the information to hand, but I asked about the number of properties within the care of the OPW where derelict site notices may have been served. Has the Minister of State any information on that?