Ciarán Lynch (Cork South Central, Labour)
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The purpose of the meeting is to consider a motion referred by the Dáil regarding the draft Capital Carryover Order for 2013 re Finance Act, 2004 (Section 91) (Deferred Surrender to the Central Fund) Order 2013. Item 1 on the agenda is consideration of the motion and I welcome the Minister for Public Expenditure and Reform, Deputy Brendan Howlin, and his officials and thank them for assisting in our consideration of the motion. A briefing note has been provided by the Department. If we adhere to a reasonably strict schedule, following the Minister's address to the select sub-committee, each of the Opposition spokespersons can respond and an open discussion will follow. I call on the Minister to make his opening statement.

Brendan Howlin (Wexford, Labour)
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I thank the Chairman and the committee for the opportunity.

The five-year Exchequer capital framework published in November 2011 sets out a programme of Exchequer capital investment of €17 billion between its initiation and 2016. This significant level of investment will address critical infrastructure deficits, aid economic growth and job creation and provide much-needed social infrastructure. Being conscious of the significant contribution capital savings have made to fiscal consolidation in recent years, I was determined that the capital allocation for 2013 would be maintained and would not be subject to further cuts when framing this year's budget. The overall capital budget for 2013 is €3.4 billion and is focussed on the sectors prioritised in the 2011 capital review, namely, health, education and jobs.

In July 2012, I announced a new Government stimulus initiative amounting to a package of €2.25 billion aimed at leveraging funding to support a new public private partnership programme of projects in key areas of infrastructure. Work on the initiative is being advanced by officials of my Department along with colleagues in the Department of Finance, the National Development Finance Agency and the relevant line Departments.

The ministerial order before the committee is a technical instrument. Its purpose is to allow the Dáil to formally approve the expenditure by Departments and agencies in the current financial year of capital moneys carried over from last year. The capital carryover facility forms an integral part of the five-year rolling multi-annual capital envelopes introduced in 2004. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that, for a myriad of reasons, capital projects may be subject to delays. The carryover facility allows for unspent moneys which would have been lost to the capital programmes and projects concerned, under the annual system of allocating capital, to be made available for spending on programme priorities in the subsequent year. We are all familiar with cases where people have capital to spend and rather than surrender it the moneys were spent on things that were not priorities so it is important that normal planning would apply.

The introduction of the multi-annual capital investment system has been a major positive factor in the roll-out of the capital programme. It will ensure that resources that would otherwise have been surrendered to the Exchequer are now available for spending in Departments in the following years. The multi-annual capital system has also given greater medium term financial security to Departments and implementing agencies. This in turn has facilitated better medium term planning of programmes and projects. It has also helped to eliminate the potential for wasteful spending on non-essential works in order to ensure that full capital allocations were used up.

I am sure that we are all familiar with the Exchequer and Audit Departments Act 1866. The legislation generally requires the surrender of unspent Exchequer moneys to the Central Fund at the end of each financial year. Section 91 of the Finance Act 2004 gives legal effect to capital carryover and allows the carryover of unspent voted Exchequer capital to the following year of up to 10% of capital by Vote, by deferring the surrender requirement, subject to certain conditions. Among those conditions are that the amounts of capital carried over by Vote be specified in the annual Appropriation Act of the year from which the carryover is proposed. The actual decision in principle on the amounts of carryover by Vote are therefore determined in the Appropriation Act. The Dáil again has the opportunity to endorse the amounts in its decision on the revised Estimates volume which shows the capital carry over amounts separately in the relevant Votes.

The carryover amounts provided for in the Appropriation Act are required to be confirmed in an order to be made by the Minister for Public Expenditure and Reform by 31 March of the following year, after approval of the order by the Dáil, to allow expenditure to take place. The order sets out the amounts by subhead consistent with the amount by Vote specified in the Appropriation Act. Capital carryover in a Vote does not have to be spent on the same subhead or programme where the saving occurred. It may be spent on a different programme depending on progress and priorities.

The committee will be aware that the old annual Estimates process is being replaced with a modern, multi-annual framework. The new framework will allow for full transparency about the allocations available to each Department over the coming three-year period. It will open the way for structural, medium-term planning and prioritisation within each area across all programmes with full public input and parliamentary oversight. It will also make it easier to assess exactly what Departments have achieved, and what they aim to achieve, with the public funds that are granted to them by the Dáil. It is important that the money is used and that we see an outcome for the money.

It is not enough to know how much Departments are spending the money; we want to see the outcomes. The Government is determined that every area of the public service should be accountable for performance and results. This will apply to Ministers and their Departments, as well as to all offices and agencies. The 2013 draft order sets out the subheads or programmes under which Departments and agencies propose to spend in 2013 the capital carryover amounts specified by Vote in the Appropriation Act 2012. The total amount proposed in the draft order for 2013 is €107.237 million, which amounts to 2.8% of the 2012 forecast outturn.

The total 2013 gross Exchequer capital provision allocated in budget 2013 amounts to €3.435 billion. The capital carryover of €107.237 million will bring the total Exchequer capital available for spending in 2013 to €3.542 billion. The main priority areas for spending of the capital carryover of €107.237 million are as follows. The Department of the Environment, Community and Local Government is allocated €43 million in total, with €9 million for the Leader rural development programme to meet demand from local Leader action groups; €12 million to support the continued implementation of the mortgage to rent scheme and to provide support for the voluntary and co-operative housing sector; €10 million for local authority housing provision; €10 million for landfill remediation to meet outstanding deliverables following an ECJ judgment; and €2 million to enhance investment in fire and emergency services.

Some €6 million will be spent by the Department of Agriculture, Food and the Marine on afforestation premia as well as funding new forest planting. The Department of Jobs, Enterprise and Innovation will allocate €11 million to Enterprise Ireland for the innovation fund Ireland and grants to client companies; €7 million through the IDA for research and development grants to industry and €7 million for the science and technology development programme to fund a larger, internationally visible SFI research centres programme with major industry partners.

Some €10.4 million will be spent by the Department of Communications, Energy and Natural Resources to provide continued funding for a better energy programme pending the introduction of the pay as you save model. The Department of Education and Skills is allocating €10 million for the delivery of large scale projects in the primary and post-primary building programme. A further €9 million will be used for the St. Patrick's teacher training college building project and for building projects already under way in UCD.

Some €1.2 million will be allocated by the Department of Arts, Heritage and the Gaeltacht to meet commitments under the EU habitats directive on the preservation of active raised bog habitats. Some €1.05 million will be allocated by the Department of Social Protection for work on office accommodation for the Integrated Employment and Income Support Service, Intreo, and public service card initiatives. A total of €1.587 million will be spent by the Department of Defence, the Department of Justice and Equality and the Department of Foreign Affairs and Trade on buildings, the State pathology lab and the upgrading of ICT equipment for the Passport Office.

Departments and agencies have delegated responsibility to manage their capital programmes and projects within the terms of the delegated capital sanction as set down my Department. The availability of these capital carryover amounts in 2013 will assist them within this framework in tackling economic and social infrastructural priorities in their areas. I commend the order to the sub-committee.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I welcome the Minister. Everyone is in favour of money that can be carried forward to be spent in 2013 on projects and capital investment needed at that time. I would be surprised if anyone had a difficulty with the principle. The Minister could not have anticipated the questions I would ask but the script he has provided does not answer the questions on which I seek information. If he does not have information today, I would like the questions to be answered before the referral to the Dáil for a vote. I do not when know when that is.

Brendan Howlin (Wexford, Labour)
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Before the end of March.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I would like the information to be provided to the committee before the vote in the Dail to accept it.

A number of Departments that are seeking to carry forward unspent allocations for capital expenditure in 2012 to 2013. Of those, which Departments required a Supplementary Estimate in December? We had Supplementary Estimates across a range of Departments amounting to over €1 billion. It was the highest level of requirement for Supplementary Estimates to meet current expenditure last year since the foundation of the State. That is one year after the Department came into operation and I would have expected expenditure to be closely matched.

I can understand how it happens in the Department of Health and HSE. We hear the debate in the HSE that some money allocated for capital ended up being used for current spending. Did that happen in any of the Departments that required Supplementary Estimates? How much of the money included in the Estimate for capital expenditure last year is not being carried forward because it was used as current expenditure?

The Oireachtas approved the Estimates for 2012 when they were announced by the Minister in December 2011 and funding was provided in the capital investment programme to cover a large number of projects. The reason we have a carryover is because projects do not proceed due to planning, an overestimation or tenders not being in place. Perhaps the planning process had not been completed. What are the five or ten largest projects that did not proceed in 2012? The Minister has provided us with a breakdown of Departments and subheads but I would like to know the breakdown by project. The schools building programme amounts to a large part of this. The schools building programme contained an estimate for the year and if the officials in the Department of Education and Skills building unit are competent, which they are, they had an idea of the projects on which the funding was to be used. Some did not go ahead for a variety of reasons. What projects did not proceed in 2012 for which the Oireachtas had provided money? Some are multi-million projects, with staged payments spanning a number of years. It may be that the project proceeded but the work was not completed but I am sure some projects did not get off the ground when it was expected. Perhaps the Minister can provide information on the project that did not proceed.

There is nothing in the document about why the money was unspent. There is no argument about how the money will be spent in 2013. What mechanism does the Minister have in place to ensure the capital budget in 2013 will be spent in 2013 so that we are not back here next year in the same position?

Can the Minister explain the amount surrendered to the Exchequer in these Departments because it could not be carried over? On page 12, the Department of the Environment, Community and Local Government carried some €43 million into 2013, of which €34 million was for water services and €9 million for Leader projects. The next column shows €56,693,000 in remaining savings that was not used to meet capital savings shortfalls in headings under A3 and A9. I understand these moneys were surrendered to the Exchequer. Can we have a summary of how much was surrendered and could not be carried forward because it did not meet the guidelines in legislation? The money we carry forward can be used this year but the money surrendered, which bolstered the deficit for the end of last year, is a bigger shame. I am not talking about people spending money willy-nilly in the last two months of the year. I can understand ongoing projects having planning issues. When Departments come to the Minister with an estimated requirement for capital expenditure, the Minister must ask himself, before finalising Estimates for the current year, what discussions he will have with the line Minister of the Department.

The Minister said €99 million was unspent last year in the capital budget. Of that, €43 million could be carried forward to 2013 under the rules but €56 million was surrendered to the Department of Finance because the recipient Department could not spend it. Are some Departments coming in with higher Estimates to cover themselves and looking for money that they will have to surrender back to the Exchequer at the end of the year?

Brendan Howlin (Wexford, Labour)
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Much of the drilling down should be done at departmental level because the Department controls that. We are looking at the over-arching carry over. The general principal is that the maximum that can be carried over is 10%. By definition, it is a small subset of the total capital allocated. We monitor it on a monthly basis. Contrary to the normal workings of my Department, we push them to spend because we are anxious that allocated capital budgets are spent.

For a variety of reasons, difficulties arise. There was an underspend last year in the water services section of the Department of the Environment, Community and Local Government and I had regular conversations with the Minister.

Seán Fleming (Laois-Offaly, Fianna Fail)
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We can give him a list of projects that are ready to go.

Brendan Howlin (Wexford, Labour)
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He was trying to push local authorities and many of them were reluctant to embark on new projects because of the creation of the new water authority. That annoyed me but he did push the local authorities on that.

The Deputy asked what Departments had Supplementary Estimates and mentioned a sum of €1 billion. The Departments of Health and Social Protection had Supplementary Estimates.

Seán Fleming (Laois-Offaly, Fianna Fail)
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There were six or seven Supplementary Estimates, although some of them were smaller. Those were the two big ones.

Brendan Howlin (Wexford, Labour)
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Many Departments had savings and there were technical Supplementary Estimates for some to allow certain areas of expenditure and those were the two significant Supplementary Estimates. In the social protection area, a chunk of that was a short-fall in PRSI income. It was not a requirement for an additional spend, it was a re-labelling of spending, where money that came into the Exchequer that was originally labelled as PRSI as it came in from the Revenue Commissioners was actually universal social charge or tax. PRSI goes directly to the Department of Social Protection. If it is not PRSI, it is general tax and goes into the Exchequer, which leaves a short-fall into the funding stream for social protection. That had to be made up by an additional vote of money. It was a balancing exercise where no net extra money was spent, it was just money being re-labelled. We tried to deal with that short-fall in PRSI in the budgetary measures we announced this year.

The figures are in the document we sent the committee. The unspent amount of the total capital last year was €252.4 million and the carry over was €107.2 million. The money that was not spent and not carried over amounted to €145 million and that goes back to the Exchequer.

Seán Fleming (Laois-Offaly, Fianna Fail)
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There are two issues: the Department of the Environment, Community and Local Government and schools, and we will follow those up. We understand that there can be planning issues with the schools building programme and we hope the schools are built as soon as possible.

Brendan Howlin (Wexford, Labour)
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A major chunk of additional money will come under the PPPs that will fall under the stimulus plan. The first school bundles were signed off at the end of last year. This will not appear in voted capital. I hope to group bundles - that is happening with the next two bundles. A total of 12 schools will be signed off in May, and the first bundle is now under construction.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will the Department's capital expenditure be commensurately reduced to take account of that?

Brendan Howlin (Wexford, Labour)
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No, this is additional stimulus. Ground work is underway on the Grangegorman project, which is the flagship project. We hope to make significant progress on it. I had a meeting with the Vice President of the European Investment Bank on that issue yesterday.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Department of the Environment, Community and Local Government is one of the biggest concerns. Leader money is a major issue, particularly where it has moved slowly. On that side, applications going into local development companies have declined because of the requirement for matching funding from the promoter of the business. The lack of any such funding, which also relates to the banks not releasing credit, is now slowing down the Leader programme. As a result some of the Leader funding that was meant for job creation is being reallocated by Leader groups for community and recreational facilities. Every playground being built in the State is being substantially funded by the Leader programme. The programme probably intended to spend a percentage of the budget on that area, which is unrelated to economic development, but the amount has been increased because business applications are falling away. Will the proposal to transfer Leader companies into local authorities have even more of an impact? Staff are worried the Leader companies will go in under the ring-fenced heading but when they move in three or four years' time, they will be subsumed. People are afraid that ultimately the money will form part of the local authority budget and Leader programme funding will end up being used to fill potholes. The Minister might say that will not happen but that is what people fear.

Going back to Irish Water and water sewerage, must local authorities make a contribution to the cost through development levies? The local authorities had to make an economic case, saying how many people would be served by a new facility and the cost per household. Sometimes financing from development levies was necessary. I can understand the local authority that has a kitty of development levy money will not want to spend it and then see it taken away by Irish Water. There must be some recompense and I know agreements are being made between Irish Water and the local authorities. The new water supply and reservoir in County Laois was built entirely with development levy money and serves thousands of people. Those development levies were collected locally and are now being effectively sequestered by Irish Water.

Brendan Howlin (Wexford, Labour)
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The water is still local.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Irish Water will not be up and running for a couple of years. I am concerned local authorities will stand back from completing projects. Is there any requirement for some small part of the funding to come from the local authority's own resources in addition to department money? If there is such a requirement, we can understand why local authorities will not want to do this. We need to see construction activity in some provincial towns that need sewerage upgrades and work on the water quality infrastructure and this would be the perfect stimulus package.

Brendan Howlin (Wexford, Labour)
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I will leave it for the Minister for the Environment, Community and Local Government to explain Leader and the new integrated community and enterprise structures in detail. It is, however, a good idea. I was involved in the initial modelling under the better local government programme of extending the umbrella between local authorities and community development groups. That was an important step and there must be better integration and coordination now when resources are scarce.

That is a good strategy. I raised the issue on Irish Water for the very reason on which the Deputy has expounded. We must adopt a view on it. I do not want to justify things but it is not unreasonable that a local authority might take a view that we are not spending our own money to draw down additional money on important water projects, whether sewerage or clean water initiatives. We need to overcome that until Irish Water is fully up and running and takes over the service. The discussions are ongoing but it could be usefully developed with the Department of the Environment, Community and Local Government.

It is odd for the Department of Public Expenditure and Reform to be pushing people to spend money but we need to spend money in this area. It is important that there is a smooth transition from the local authority structure of providing water services to the services provided by the integrated Irish Water. There is a requirement at local level for matching funding.

Seán Fleming (Laois-Offaly, Fianna Fail)
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In relation to the public private partnerships for schools and other areas, I presume the National Development Finance Agency, NDFA, has a role but does it come under the Department of Finance or the Department of Public Expenditure and Reform?

Brendan Howlin (Wexford, Labour)
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I have a very close liaison with the NDFA. It is part of the NTMA family so it comes under the Department of Finance, but the Secretary General of my Department is a board member of the NDFA. The NDFA is very proactive and my staff and I meet with the NDFA all the time. When I go to meetings with the European Investment Bank or others, a representative from the NDFA normally attends also. It is driving the agenda for us in a very clear and co-ordinated way.

I might do a separate briefing note for the Deputy on the roll out of public private partnerships, where we expect to have PPPs for schools, primary health care centres and so on.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister will be pleased to learn that this morning I will skip the discussion on the location of primary health centres.

Brendan Howlin (Wexford, Labour)
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Excellent.

Ciarán Lynch (Cork South Central, Labour)
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What has been set out is a process to avoid the level of ballooning expenditure at the end of year. I know from working in the public sector that at the end of December, tables and chairs would arrive.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Other things would arrive later.

Ciarán Lynch (Cork South Central, Labour)
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There is a general concept of project management that arises from such an approach. In his opening address the Minister stated:

Capital carryover within a Vote does not have to be spent on the same subhead or programme where the saving occurred. It may be spent on a different programme depending on progress and priorities.

Brendan Howlin (Wexford, Labour)
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That is a point Deputy Fleming raised. I had a concern. The only area in which I saw a porousness between current and capital spending was in the HSE. The staff in the HSE felt that money was money. We need to have very clear segregation not only between current and capital spending, which is very basic. Money voted for mental health services should be spent on that, or moneys voted for children or disabilities should be spent on the area for which voted and not sloshed around and spent as the HSE decides. This committee in addition to the Committee of Public Accounts has a job of work to ensure that actually happens in a very transparent way.

By and large that is the way it is now. The Chairman asked two questions on the allocation of capital budgets to current spending, one cannot reallocated capital to current spending. I want to be flexible. If a Minister tells me that the same envelope of money can be better spent on a different capital project that is a new priority I have no difficulty in allocating that.

Ciarán Lynch (Cork South Central, Labour)
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At a meeting of Cork City Council one of the difficulties expressed is that whereas they are receiving money for road work programmes, bicycle lanes, bus routes, green routes and all the rest, their basic ability to deal with potholes and the absence of funding for that type of maintenance is causing difficulties. Is there a flexibility at the end of the year when there is a carryover that the council could target the money to a more general use rather than to specific construction projects?

Brendan Howlin (Wexford, Labour)
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That is a very pointed question and I am also going to be very pointed as I asked a similar question recently. The filling of potholes is funded by an Exchequer grant to supplement the matching funding by the local authority to some degree. The degree of matching funding varies significantly. I am afraid Cork County Council is not great at providing significant matching funds.

Ciarán Lynch (Cork South Central, Labour)
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I am referring to Cork City Council.

Brendan Howlin (Wexford, Labour)
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I do not know, I have looked at the situation in County Cork.

Ciarán Lynch (Cork South Central, Labour)
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Cork county has potholes.

Brendan Howlin (Wexford, Labour)
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The local authority in County Kerry puts a significant level of its own resources into matching funds and it sees the filling of potholes as a priority.

One of the points I have been making is that we cannot reward bad practice. If one does not spend one's own money, it is bad practice that the Exchequer will give the body more resources. Whereas a county that gives priority to the maintenance of roads and ponies up its own money to match the Exchequer money it draws down would be disadvantaged if that were to apply. I have had that discussion to ensure that does not happen. I remember that from my time in local government. I know from discussions with the Minister for Transport, Tourism and Sport, that Deputy Varadkar's clear priority is that money should be prioritised for maintenance rather than spent on new initiatives and new projects.

Ciarán Lynch (Cork South Central, Labour)
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In respect of the application of the 10% rule, there are different headings. For example, under B3 - water services investment, there was a carry forward of €34 million and under E9 - Leader programme, there was a carry forward of €9 million. The carry forward from B3 runs in at around 10% of the initial sum granted in the year. However, under the Leader programme there was an underspend of over €19 million but the carryover is actually €9 million, which is a 5% carryover. Is that correct?

Brendan Howlin (Wexford, Labour)
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The figures are accurate.

Ciarán Lynch (Cork South Central, Labour)
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Why was the full 10% not carried over in the Leader programme?

Brendan Howlin (Wexford, Labour)
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I will check that fact for the Chairman. Normally this is what the Department requests. I will ask my officials and come back to the Deputy.

Ciarán Lynch (Cork South Central, Labour)
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As Deputy Fleming indicated, there has been a difficulty with the start up of this programme. We hope that the full allocation will be used up from 2012.

Brendan Howlin (Wexford, Labour)
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The Chairman has been in touch with me on having quarterly oversight of it. I think the capital side of it should be part of that process. Obviously capital is not spent in the same way as current expenditure. There are no neat quarterly outgoings and one could have a significant spend at the end of the year, the way things happen. It would be no harm if the committee kept an eye on that too.

Ciarán Lynch (Cork South Central, Labour)
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We are waiting on a response on that from the Department.

Brendan Howlin (Wexford, Labour)
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I will ensure that happens as well.

Ciarán Lynch (Cork South Central, Labour)
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Thank you, Minister.

Peter Mathews (Dublin South, Fine Gael)
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I welcome the Minister and his officials. This is all new territory for me. I am learning. Deputy Fleming has been all over this and so has the Chairman in the past. Even the word "savings" usually implies that one has spent what one thought one would spend and one did not have to spend as much as expected. However, what we mean by savings in this context, is non commenced expenditure.

Brendan Howlin (Wexford, Labour)
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Unspent money - rather than savings

Peter Mathews (Dublin South, Fine Gael)
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That is correct, but it means also that the project on which one was planning to spend money has not begun or has not been finished.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Half of the work could be done.

Peter Mathews (Dublin South, Fine Gael)
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The physics have not been completed.

Brendan Howlin (Wexford, Labour)
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There could be a variety of reasons. In a major project, the actual timing of the payment schedule, it could result from a delay in planning and a variety of other reasons. It does not mean the project is not going ahead.

Peter Mathews (Dublin South, Fine Gael)
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Savings usually implies that it is after everything has been done, that one has saved a certain amount.

Brendan Howlin (Wexford, Labour)
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It is probably a misnomer.

Peter Mathews (Dublin South, Fine Gael)
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A better description is unspent money.

Brendan Howlin (Wexford, Labour)
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Yes, unspent.

Peter Mathews (Dublin South, Fine Gael)
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Each Department has its capital expenditure budget and its current expenditure budget. I must begin to get my head around what goes into capital. Should repairs and renewals be under the capital heading? From day one machinery has always been seen as capital expenditure.

If one must repair it and so forth, this is done to keep the machinery operating. It is, therefore, a little like a subhead of capital expenditure and might be better grouped as such. We referred to roads maintenance and so on.

Brendan Howlin (Wexford, Labour)
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I am discovering some of the things-----

Peter Mathews (Dublin South, Fine Gael)
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It would be easier and more logical to do this.

Brendan Howlin (Wexford, Labour)
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I discovered, for example, that the new naval vessel under construction is categorised as current expenditure. One would expect it to be considered capital expenditure but for some reason it is-----

Seán Fleming (Laois-Offaly, Fianna Fail)
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In what category are Garda vehicles?

Peter Mathews (Dublin South, Fine Gael)
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Anything that provides economic use beyond the-----

Brendan Howlin (Wexford, Labour)
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When I ask these questions the definition provided is that something is a consumable and deemed to be consumed once it is provided, for example, in the case of Garda vehicles. Perhaps the sub-committee will examine this issue.

Peter Mathews (Dublin South, Fine Gael)
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It should be examined because it is an important investment related issue. One invests a lump sum to obtain an economic benefit over an extended period.

Brendan Howlin (Wexford, Labour)
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These things are not written in stone. I have moved Garda vehicles to the capital side. As the Deputies will be aware, I provided a capital grant of €5 million this year to acquire more Garda vehicles. It is easier to find capital moneys than it is to find current expenditure, although perhaps I should not say that loudly.

Peter Mathews (Dublin South, Fine Gael)
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That reasoning is fortuitous.

Brendan Howlin (Wexford, Labour)
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It is also logical to consider a Garda vehicle capital expenditure.

Peter Mathews (Dublin South, Fine Gael)
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Yes, it is an asset.

Brendan Howlin (Wexford, Labour)
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We will certainly look at this type of expenditure.

Peter Mathews (Dublin South, Fine Gael)
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It is an economic benefit that lasts for more than one calendar year. As such, its overall investment cost should be spread over the period of its benefits. Basically, we have the grids of all the Departments and their capital levels of expenditure. Repairs and renewals of the capital items should probably be considered as a sticking plaster to put on to capital expenditure rather than current spending as the latter refers to salaries and similar items that are current. It is a good idea, when examined closely and constructively, to approve a carryover of the unspent amounts for valid projects which are still worthy of support.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I welcome the provision of a sum of €10 million for local authority housing. Given the current price of property, it would be good for local authorities to invest more in housing because they would obtain good value in current conditions. While it is good that this provision has been made, it would be even better if a larger sum were provided. The local authority housing list is long and investment in this area would be a good idea.

Unspent budgets were not always carried over. For this reason, I welcome the decision to carry over the moneys and proceed with the projects.

Brendan Howlin (Wexford, Labour)
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Housing policy is set by the Department of the Environment, Community and Local Government. The Minister of State at the Department, Deputy Jan O'Sullivan, will make the case for the housing side. There is a dichotomy between, on the one hand, the large number of people on the housing list and, on the other, a large number of empty houses. One of the problems is that many of the empty houses are in the wrong place. We need to link the two and the Minister of State is working hard on this issue.

Ciarán Lynch (Cork South Central, Labour)
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How will this process work? Let us take as an example a case where the Department of Education and Skills rolls over 10% of its allocation for a capital project other than a schools building project, which are confined, once-off projects. The capital allocation may be for the acquisition of desks and chairs or to tile a gymnasium. How would a local school know that unspent moneys will be available to it on 1 January of the following year?

Brendan Howlin (Wexford, Labour)
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In that case, the Department of Education and Skills will give the sanction and indicate what is permissible expenditure. If this expenditure bridges two years, it remains permissible and sanctioned by the Department. The Department gives the sanction to acquire or purchase a product and pay the invoice.

Ciarán Lynch (Cork South Central, Labour)
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I will give a case in point. When I worked in a vocational education committee it was almost standard practice to purchase computers at the end of the year. The worst time of the year to buy computers is December when demand is at its highest and these products are most expensive. The cheapest time of the year to buy products such as computers is January when one has sales and new products. One can make a substantial saving by purchasing a personal computer in January. In my VEC days, could I have asked my line manager for permission to hold over a certain sum, let us say €4,000, on account and spend it in January. Making a purchase in January would have secured better value for the Exchequer.

Brendan Howlin (Wexford, Labour)
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In that instance, it would be preferable to plan from the beginning to make the purchase in January.

Ciarán Lynch (Cork South Central, Labour)
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Sometimes funding is not made available until February, March or April.

Brendan Howlin (Wexford, Labour)
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We are discussing multi-annual funding. An envelope is provided for three years which allows people to ask what is the optimum time to buy certain products. A new procurement regime is also in place to ensure this happens.

I remember visiting a school in my constituency which was scheduled to be completely refurbished. This was under the old regime. At the end of the year, the school in question spent a considerable sum on new wiring and white boards, despite the fact that the building was about to be gutted. The type of approach is wrong and must be stopped. It was adopted, however, because if one did not spend the money, one lost it.

Peter Mathews (Dublin South, Fine Gael)
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Under the education and skills heading, reference is made to works under way on buildings at St. Patrick's College and UCD. Another issue arises in respect of third level campuses. Capital expenditure in third level campuses is not confined to lecture theatres, laboratories and so forth. It should include facilities such as running tracks. UCD, for instance, had to move its running track from the Belfield side of the N11, which is part of the campus, onto the Clonskeagh end where the nexus of sports facilities is located. It was not possible to resurface the old track, as required for health and safety reasons, and it had to be relocated to the other side of the campus. This cost remained outside the most recent sports grants. This facility should be regarded as a priority on a campus of 24,000 students. A certain level of sports facilities must be available if a campus is to attract postgraduate research and so forth and an athletics track is a sine qua non in this respect. I encourage those responsible to ensure the cost of the athletics track is taken under the umbrella of education and skills grants.

Brendan Howlin (Wexford, Labour)
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I will convey the Deputy's views to the Minister for Education and Skills who is responsible for the line Department.

Peter Mathews (Dublin South, Fine Gael)
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The Minister has the money.

Brendan Howlin (Wexford, Labour)
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In terms of scarce resources, line Departments must make choices if lecture space and so forth are vitally needed.

Ciarán Lynch (Cork South Central, Labour)
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I thank the Minister and his officials for attending. That concludes the select sub-committee's consideration of the motion. In accordance with Standing Order 87, the clerk to the committee will convey a message to that effect to the Clerk of the Dáil. Under Standing Order 86(2) the message is deemed to be the report of the committee. Is that agreed? Agreed.