Mr. Tom O'Mahony:

I have furnished the committee with an advanced briefing and have tried to strike the right balance in terms of the level of detail. However, I am always happy to get feedback, either directly or through the Clerk to the Committee, on whether the committee would like more or less detail on what is provided. As committee members have this briefing material, I will keep my opening remarks quite short.

As the Comptroller and Auditor General has said, in 2012 our overall gross expenditure was just over €2 billion. Almost 22% of this did not come from the Exchequer but from appropriations in aid, mainly motor tax receipts channelled through the local government fund. The Vote was split more or less 60:40 between capital and current spend. In 2012, some 84% of the Vote went towards the land transport programme, mainly roads at €1.1 billion, public transport investment at €254 million and public service provision payments at €290 million. The balance was divided between the tourism programme, at €143 million, sports at €80 million, maritime transport and safety, including the coastguard, at €70 million and civil aviation at €28 million. Our administrative budget represents just 1.7% of our overall programme spend, at €34.5 million.

The year 2012 was the first year of implementation of the comprehensive review of expenditure. The Department successfully delivered on the targeted reductions in its expenditure, achieving a 14% reduction on the previous year. This was achieved despite the fact we had to reallocate funding within our subheads in order to supplement the public service subvention for CIE.

Despite these financial constraints and a continuing and substantial reduction in our staffing levels, the Department contributed to a number of good outcomes for 2012 in transport, tourism and sport, and I will now give a quick overview of these. In transport, we oversaw an investment of €254 million in the upgrading of public transport infrastructure and services, including approval for the Luas cross-city project and the roll-out of the new Leap card.

We also administered €605 million in capital investment on national roads, €42 million in ongoing national roads maintenance and €377 million on regional and local roads. Some 1.73 million passenger journeys were funded through the rural transport programme. The national vehicle driver file collected €1 billion in motor tax receipts, issued 4.62 million motor tax discs and 671,000 driving licences.

It was also a successful year from a safety perspective. Road fatalities reached a record low of 162. The Irish Coast Guard responded to almost 2,000 incidents, assisting more than 2,700 people and saving more than 160 lives. The air accident investigation unit published 23 air accident reports.

While 2012 was a challenging year for tourism, revenue from overseas visitors increased by 4.5% to €3.68 billion. The sector saw a turnaround in fortunes from the US market, which was up by 10%. Employment in the tourism and hospitality industry grew by 5,000 to reach 185,000 and 2012 was also the year that launched The Gathering initiative, which delivered exceptional results in 2013.

The year 2012 was also good for sport. The programmes of the Irish Sports Council contributed to securing 64 medals at Olympic, Paralympic, world and European levels. We also re-launched the sports capital programme with €19.8 million paid out in sports capital grants and €31 million allocated under the new round.

On the two specific issues referred to by the Comptroller and Auditor General in his 2012 report, I will comment briefly as follows. As mentioned, the management of the fixed charge notice system is largely a matter for others but there is one recommendation in the report that relates to the responsibilities of the Department of Transport, Tourism and Sport. This concerns the mismatch of driver information held by the Garda and by the national vehicle driver file. It is suggested that a regular review of information should be conducted between the two bodies.

The Department has been participating for the past year in a penalty points working group that has been addressing the difficulties relating to the gathering and exchange of accurate and up-to-date information within State agencies. As the committee is aware, there have been a number of examinations and reviews of the fixed charge notice and penalty points system over the past two years and, following the most recent report from the Garda Síochána Inspectorate, a criminal justice working group was established which comprises representatives of all relevant State agencies. The main function of the working group is to oversee and facilitate the recommendations contained in the inspectorate report. The group will subsume the work of the penalty points working group and therefore will address the issues raised in the Comptroller and Auditor General's report. The criminal justice working group is required to report to the Government regularly and its first report will be submitted in July.

At the conclusion of his statement the Comptroller and Auditor General asked me to expand on the issue of company cars. This is not covered in my opening statement, so when we reach the question and answer session, I will deal with the matter in detail.

As regards chapter 14, which relates to Road Safety Authority cash reserves, I believe that the main conclusion to be drawn is a very positive one. Since the RSA was established, it has been moving from a position where it was very dependent on Exchequer funding, to the tune of €40 million in 2008, to an Exchequer allocation of only €3.37 million this year. It is expected to be entirely self-funding next year. It has achieved this even while taking responsibility for two new functions, the commercial vehicle roadworthiness service and the national driver licence service, each of which involved considerable initial outlay.

If an agency is going to be self-funding, it needs to carry sufficient reserves to meet the needs of its capital programme and also to deal with cyclical downturns in income. The latter point is a particularly important one that I am sure the chief executive officer will address in more detail later on. The recession has meant that we have an ageing car fleet. This means there is an above average demand for the national car test, NCT, and therefore a spike in income from that source. That trend will reverse as the economy grows in the future and people replace old cars with new ones so NCT income may fall for a time.

The annual service level agreements in place between the Department and the Road Safety Authority have proved successful in ensuring the Road Safety Authority has adequate funding to deliver its functions, including an essential capital programme, while also providing the mechanisms for identifying situations where the capital reserve exceeds the agreed amount in reductions to Exchequer draw-downs. The Road Safety Authority has not received any capital Exchequer allocation since 2010.

The report also identified a number of areas for improvement and made a recommendation as to how such improvements can be achieved. Recommendation 14.1 of the report suggests that the Department and the Road Safety Authority should develop key performance indicators and conduct a formal review of actual performance each year against those indicators. The Department has accepted this recommendation and, in addition to the monthly update meetings between the Department and the CEO of the Road Safety Authority that have taken place for some time, it will carry out a formal annual performance review this year. Key performance indicators are set out by the Road Safety Authority in its business plan for 2014, and these will also be reviewed in the context of the annual performance review.

That concludes my opening statement and I am happy to take the committee's questions.