Brian Hayes (Dublin South West, Fine Gael)
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I thank the Chairman and the members of the committee for giving us the opportunity to present our Estimates for this year. I welcome my colleagues from the Office of Public Works who have joined me for this presentation.

Before I refer to some of the key elements of the 2013 Estimate I will bring the committee up-to-date, as I did last year, on some of the areas where the OPW is a key driver in the Government's public sector reform agenda. The public sector, not unlike the OPW, carries out myriad functions and is spread throughout the country. The OPW has for years performed as a catch-all organisation for a vast array of public service activities. Flood risk management, property management and maintenance, heritage services and procurement all form key parts of the ambit of our office. In essence, these are all forms of shared services provided to the wider public service or directly to the public at large. In this respect the OPW is well-positioned to be one of the central drivers of the reform agenda.

The Office of Public Works is the lead agency and actively engaged in two main areas of reform set by Government, procurement reform, which is soon to be devolved to the new office of Government procurement, and property asset management, where the Chairman of OPW is the senior responsible owner for this aspect of public service reform.

The reform of public procurement is a critical element of the Government's public service reform plan. Procurement of supplies and services accounts for approximately €9 billion of current expenditure by the State per annum. This represents a significant portion of overall spending and it is, therefore, essential that the public service avails of the maximum value-for-money and operational efficiency in its approach to public procurement. In 2012, an external review of the central procurement function was commissioned by the Department of Public Expenditure and Reform. The report of the review, which was published in September last, found that significant savings could be achieved through the implementation of a transformational change to the central procurement model. Last year on foot of the findings of the report the Government agreed to a range of actions for the reform of the central procurement function, including the appointment of a chief procurement officer, CPO, Mr. Paul Quinn, and the establishment of the office of Government procurement. This new approach to public procurement will involve: integrating procurement policy, strategy and sourcing in one office; strengthening spend analytics and data management; greater aggregation of purchasing across public bodies to achieve better value-for-money and lower administrative overheads; examining the specifications set out for goods and services; evaluating demand levels to assess how demand and volume can be reduced; and strengthening supplier and category management.

One concern of this committee in the past was the possible restriction of opportunities to small suppliers under the new arrangements. The office of Government procurement will continue to engage with the small and medium-sized enterprise sector in this regard and in the past two years several significant steps have been taken to improve SME access to public procurement. Seminars and workshops have been held and in excess of 4,500 SMEs have been hosted to help demonstrate the procurement process. The National Procurement Service has established an industry collaborative working group involving major business representative groups and the various public sector groupings. The working group aims to identify the challenges for SMEs when transacting business with the public service and, most importantly, to come up with practical solutions to these challenges.

The question of property is a key part of the work of the Office of Public Works. We are also leading the way with reform in this area. The number of staff in the public service will fall by approximately 40,000 by the end of next year, 2014, and this creates an opportunity to significantly reduce the cost of office accommodation, which is one of central government's greatest administrative overheads after pay and pensions. OPW has already made progress in this area and departmental rents have fallen from €130 million to €107 million in the period from 2008 to 2012. Coupled with further organisational rationalisations, such as shared services and the abolition of agencies, this will continue to facilitate further reductions in the amount of accommodation required by the public service. As a leader of this area of reform the OPW is taking a whole-of-government perspective on how best to manage public service property to ensure optimal value-for-money is achieved.

The Chairman of the OPW is finalising a property management plan currently and I hope to be in a position to present it to Government shortly. One critical element of the plan is to progress the development of a map-based public service property inventory. This issue has also been raised by this committee in the past.

In my brief as Minister of State with special responsibility for public service reform I am taking the lead on shared services and Ireland Stat, two crucial areas of public sector reform. As Deputies are aware, the Government considers the implementation of shared services to be a key enabler to reduce the cost and labour intensity of back-office support functions in the public sector. Significant progress has been made in establishing a human resources and pensions shared services centre for the Civil Service and the first Departments and offices have recently moved to the new service. A business case for payroll shared services will be presented to Government shortly and work is under way evaluating the suitability of our financial management and banking functions for shared services. The publication of the OPW Estimate today shows the maintenance of State accommodation being centralised on the OPW vote. The rationalisation of this service will produce savings, directly by the OPW prioritising the operation of planned and preventative maintenance and indirectly on staffing in Departments in off-loading their property maintenance responsibilities.

Ireland Stat is a new whole-of-government performance measurement system, currently in pilot mode, which aims to meet those commitments and to answer the question of how Ireland is doing in a range of areas. A key commitment in this e-Government area is to ensure that data held by public bodies is made available and easily accessible online for reuse and redistribution.

The 2013 Estimates process we are engaged in today is yet another example of reform.

The Government is committed to being transparent, accountable and efficient in the provision and consumption of Government funding. In addition, this reform will see the budget for 2014 brought forward to October of this year, thereby allowing greater opportunity to consider and plan for the 2014 expenditure commitments. Before members today, the Office of Public Works, OPW, having been involved in the pilot of this performance budgeting process, is presenting a clear plan for expenditure in 2013 with a summary review of what was achieved in 2012 with the funding provided. 2013 will be a critical year in terms of delivering on OPW objectives, the thrust of which was set out in my appearance before this sub-committee last October. Given the timing of this appearance, it must be acknowledged that resources allocation for the current year is already well established, with 94% of this year's capital allocation and more than half of the 2014 allocation contractually committed at this stage. Capital unitary payments for the convention centre in Dublin, flood relief projects and building works to maintain the fabric of buildings and deal with the ongoing office rationalisation programme will absorb the medium-term OPW capital allocation.

On the current side, wage payments for the 1,700 permanent staff, unitary payment commitments and contractual commitments for rent on buildings occupied by Departments account for the most part of the 2013 allocation. The remaining allocation will be required to fund property maintenance, drainage maintenance and the heritage service programme, which is a critical component in the Government's efforts to revive and develop the tourism sector.

The most significant part in monetary terms of the 2013 allocation is €70 million on the flood risk management programme. I expect members to welcome the fact that the Government and the OPW have prioritised this area of funding to ensure greater protection is provided to the public. The capital part of the allocation, which is largely committed for the coming years, will allow for the provision of both major schemes and the continuation of a highly successful scheme of minor protection works through local authorities. Major schemes to be advanced in 2013 include Waterford, Carlow, Bray, Fermoy, Mallow, Ennis and Clonmel. Further funding will be provided to local authorities in 2013 to progress minor works schemes in addition to the €21.6 million that has been provided to local authorities since 2009 in respect of 402 approved projects. The 2013 allocation also will allow for the continuation of the catchment flood risk assessment and management, CFRAM, programme of studies. This important programme involves detailed assessment of the most significant flood risk areas nationally and based on these assessments, the development of a prioritised set of options to manage that risk in the future.

I am pleased to announce the Government has provided the additional investment required to expand on the successful Optimising Power at Work campaign, which now is achieving savings in excess of €4 million per annum across Departments. The new energy conservation initiative will broaden its scope from such Departments to target initially 500 large buildings from various public sector organisations. My office will lead a campaign to achieve ambitious saving targets of up to 18% of consumption within three years. While my office will lead the campaign, the service requirement will be outsourced in the main, thereby providing approximately 25 high-quality employment opportunities for suitably qualified specialists from various disciplines.

I hope I have given a flavour of the commitment the OPW and its staff demonstrate to me on a daily basis while playing their part in reforming public services and have assured the sub-committee that the funding to be approved today will be put to the best possible use in the furtherance of reform objectives. I obviously will be glad to answer any questions from the Chairman and members.