Mr. Seamus McCarthy:

The appropriation account for Vote 31 indicates that in 2012 the Department incurred expenditure of just over €2 billion. Some €1.7 billion, or approximately 83%, was spent on transport, with the remainder going to tourism, sport and the Department’s own administration expenses.
The majority of the Department’s expenditure is in the form of grant funding for other State agencies. For example, in 2012, the Department paid €1.1 billion to the National Roads Authority for its programmes of investment in the construction, improvement and maintenance of national, regional and local roads and PPP projects and the authority’s administration costs. Some €436 million was paid to the National Transport Authority in 2012 to fund public service obligation grants for transport operators, capital investment in public transport and administration expenditure. A supplementary estimate for Vote 31 was passed in November 2012 to increase the provision for the CIE companies, partly offset by savings on other programmes in the Vote. At year end, the amount liable for surrender was just over €4 million.
Chapter 14 deals with accumulating cash balances at the Road Safety Authority. In 2012, the authority had total income of €43.3 million. This included €13.6 million in State grant funding from Vote 31. The balance came from non-Exchequer sources, principally €12.5 million from application fees for driver testing and €15 million in proceeds from a statutory levy on the national car test. The authority incurred expenditure of €41.1 million in 2012, resulting in a surplus of €2.1 million for the year.
Substantial reductions in annual Exchequer funding to the authority since 2010 have been more than offset by increased income from other sources. As a result, ongoing annual surpluses have resulted in the build-up of substantial cash balances and accumulated revenue reserves. At the end of 2012, the authority’s bank balance amounted to €25.5 million and its accumulated revenue reserves amounted to €18.5 million. The bank balance included €2.7 million in fees paid for driving tests not yet taken. The chief executive officer will be able to update the committee on the bank balance and reserve levels at end 2013. The Department explained that the authority needed to have funds available for future capital projects and for contingencies. However, it was noted that addition to fixed assets by the authority in recent years was only of the order of €2 million to €3 million a year.
One of the core principles of public financial procedures is that State funds should only be issued to grantees to allow them to meet foreseeable funding requirements as they arise. Providing significant State funding in advance of when it is actually required has an opportunity cost in the form of interest on State borrowing.
Chapter 14 also reviewed the development of service level agreements between the Department and the authority associated with the funding provision. Annual service level agreements have been put in place to formalise the arrangement for the provision of services detailed in the authority’s annual business plans. These were specified in great detail, with approximately 260 output categories. The agreements provide for an annual review of the authority’s performance under the agreement, but this was not conducted for 2012. My report recommended that a smaller set of key performance indicators should be developed, with a balanced focus on the volume and quality of services. A formal review of actual performance against agreed targets should be conducted on an annual basis. The Accounting Officer and chief executive will be able to update the committee on progress in this regard.
The issues raised in the chapters on the management of the fixed charge notice system and the outsourced safety cameras are matters primarily for An Garda Síochána. Most of these have been covered in some detail at previous meetings of the committee, and I do not intend to repeat them. If required, I can outline findings on any specific aspect during the course of the meeting. Members may wish to note that just in the past couple of days, An Garda Síochána and the Department of Justice and Equality have announced changes to the administration of the fixed charge notice system that should deal comprehensively with all the recommendations addressed to the Garda Commissioner in Chapter 7.
The fixed charge notice system is primarily intended to have an impact on driver behaviour and to result in safer roads. These are objectives that are shared with both the Department and the Road Safety Authority. A key aspect of the overall penalty points system is the National Vehicle and Driver File. Responsibility for the file and for road traffic legislation rests with the Department. The authority deals with the issuing of driving licences.
One of the key objectives of the fixed charge notice system is to contribute to safer driving and reduce road accident casualties. The number of fatalities on Irish roads has declined rapidly from a peak in 2005. However, it is not clear to what extent this is attributable to the operation of the fixed charge notice system. We noted that a similar level of decline has occurred in road accident fatalities in other jurisdictions. For example, Ireland and the UK both achieved a 51% fall in road fatality rates per capitaduring the period 2002 to 2010, the latest period for which international comparisons were available. Other factors that contribute to the level of fatalities include vehicle design changes, better roads, trends in travel patterns and road safety promotion. The latter is a key activity of the authority.
One issue noted in chapter 7 relates to the incidence of unpaid fines for company vehicles, usually in cases where vehicles whose registered owners are companies are detected speeding. Because the companies declare that the drivers of the vehicles at the time cannot be identified, unpaid fines in such cases are not being pursued through the courts. This matter was raised in a 2003 report from my office. Legislation was passed in 2004 to address this, but Members may recall previous evidence that this was found to be ineffective. Revised legislation to enhance the existing provisions was passed in 2010, but had not been commenced at the time I reported. The Accounting Officer may be able to outline progress since then.