Andrew Doyle (Wicklow, Fine Gael)
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I remind members, witnesses and people in the Visitors Gallery to turn off their mobile phones. From the Department of Agriculture, Food and the Marine I welcome Mr. Brendan Gleeson, assistant secretary, Mr. Dermot Ryan, deputy chief inspector, Mr. Gerry Greally, senior inspector, Ms Emer McGeough, assistant principal, and Ms Jane Dempsey, assistant principal. I thank the witnesses for attending. Since the Department briefed us at the outset of this exercise, we have identified issues and concerns which the committee would like to clarify and express to the officials.

I note that witnesses are protected by absolute privilege in respect of the evidence they give this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, 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.

I understand Mr. Gleeson wishes to make an opening statement.

Mr. Brendan Gleeson:

It is good to be here again. We attended on 1 July 2014, when I made an opening statement and, as such, I will not take up too much time with today's one. We will briefly go through the main provisions of the heads of the Bill and set out its purpose. If anyone has any issues, we will try to clear them up. If anyone seeks further information or the committee, for the purposes of its report, wishes to know something we do not have with us, we will provide it at a later stage.

The draft general scheme of the Horse Racing Ireland (amendment) Bill 2014 has been approved by Government. In accordance with procedure, the draft scheme has been published on the Department's website and forwarded to the joint committee for pre-legislative scrutiny. The Department appeared before the committee on 1 July and the committee has met a number of other stakeholders since then. The horse racing industry makes a significant contribution to employment and the economy. It is estimated to underpin 14,000 jobs, €1.1 billion in economic output and exports to the value of €205 million to 37 countries in 2013.

Horse Racing Ireland, HRI, is a commercial State body established under the Horse and Greyhound Racing Act 2001. HRI is charged with the overall administration, promotion and development of the industry. The 2001 Act sets down the mechanism under which State support is provided to HRI. HRI provides funding for integrity services to the racing regulatory body, RRB. The Turf Club, including the Irish National Hunt Steeplechase Committee, a private body, is designated as the RRB and is charged with carrying out these functions under the current legislation. HRI has provided between €5.5 million and €7 million per annum to the Turf Club in respect of integrity services over the past five years.
In 2012, the Minister for Agriculture, Food and the Marine commissioned Indecon International Consultants to carry out an independent review of certain aspects of the horse racing industry. The Department facilitated a wide stakeholder consultation process as part of the review. Written submissions were sought from interested parties and forwarded to Indecon for its consideration. The resultant report examined the legislation, governance structures, funding and management of the industry, including the streamlining of functions assigned by legislation to HRI and the RRB, and made a number of recommendations in this regard.
The report contained recommendations aimed at providing a more viable and sustainable horse racing sector. The Minister for Agriculture, Food and the Marine, Deputy Coveney, announced his acceptance of the Indecon recommendations and his intention to introduce amending legislation to facilitate the introduction of the changes recommended by Indecon. Arising from the Indecon report, HRI and the RRB established a streamlining task force with a view to achieving efficiencies and to achieve a minimum of 10% reduction in costs, as identified in the report. Consultants Smith & Williamson were appointed by the task force to act as facilitator in these discussions. Smith & Williamson prepared a report that contained 18 recommendations, which it estimated would give rise to €1.8 million per annum in savings.
In preparing the draft general scheme of the Horse Racing Ireland (amendment) Bill 2014, the Department of Agriculture, Food and the Marine engaged in discussions with HRI and the RRB about the recommendations in the Indecon and Smith & Williamson reports over a considerable period. The draft general scheme of the Horse Racing Ireland (Amendment) Bill 2014 was circulated to a number of Departments and to the Attorney General's office for observations. A number of observations were received and these were accommodated in so far as possible in the draft general scheme. That has been forwarded to this committee for legislative scrutiny and we have been through much of that already. The Minister for Agriculture, Food and the Marine obtained Cabinet approval on 3 June for the draft general scheme and to proceed to the pre-legislative scrutiny phase.
I will briefly touch on the main provisions. The draft general scheme of the Horse Racing Ireland (Amendment) Bill 2014 builds on recommendations of the Indecon report and is intended to strengthen governance and transparency within the administration of horse racing, to clarify the respective roles of HRI and the RRB, to improve accountability and control over State funding and to streamline the administrative functions of the two bodies.
In regard to governance, it is proposed to reduce the size and alter the structure of the HRI board to improve efficiency and accountability and increase ministerial representation on the board, in accordance with the Indecon recommendations. In the context of that recommendation, Indecon would have looked at international best practice and taken that on board. The functions of the RRB will be maintained and strengthened and, in particular, the draft general scheme includes an enabling provision permitting the Minister to authorise RRB personnel to carry out functions under the Animal Remedies Act.
The general scheme provides for a single streamlined administrative structure within HRI for registration, financial and other functions of HRI and the RRB without compromising the integrity functions of the RRB or its property rights to income derived from the registration of hunters' certificates, for point-to-point racing and the licensing of participants in racing. In this context, I should make it clear that there will be no change in so far as the organisation of point-to-points is concerned. The organisation of meetings, the issuing of hunter certificates and the acceptance of horse racing entries and declarations will continue to be managed by hunt clubs. The registration functions, that is, the registration of hunter certificates and trainers, will reside along with other registration horse racing functions in HRI.
The scheme provides for enhanced control and accountability with explicit provisions empowering the Minister to issue directives to HRI, requiring HRI to comply with codes of practice and permitting the Minister to withhold funding instalments from HRI and Bord na gCon if he is dissatisfied with their strategic or other plans. It provides for the accounts of the RRB to be audited by the Comptroller and Auditor General and published and for the CEO of the RRB to attend at Oireachtas committees as required. Key provisions include those relating to improved governance - changes to the HRI board's size and structure to improve efficiency and accountability. The HRI board currently comprises 14 members - a chairman and 13 ordinary members. The Minister nominates only the chairman and one other member of the board, the latter to represent the interests of horse racing in Northern Ireland. All other members of the board are nominated by representative organisations. The Indecon report suggested that this has resulted in low levels of Government or ministerial control over the process of decision-making by the HRI board. It is proposed that the number of ordinary board members be reduced from 13 to 12, with an increase in the number of ministerial appointees from one to three. The representation from the RRB on the board of HRI will be reduced from five to three, a proposal with which the RRB does not have a difficulty.
HRI currently has 26 board committees, which are important in supporting the main work of the board. The Indecon report suggested that none of the existing committees focused adequately on the particular needs of the betting sector or on employee requirements. Against this background, the general scheme provides for the creation of two new statutory committees to represent those employed in the sector and the betting industry in addition to the two existing committees that deal with the issues of media rights and race fixtures. The scheme also provides for a standard five-person membership of all four statutory sub-committees proposed under this legislation. Those committees are the race fixtures committee, the industries services committee, the betting committee and the media rights committee. The scheme also provides for HRI to appoint the chair of the race fixtures committee. Under the current legislation, the latter committee is chaired by an RRB director of HRI.
The retention by the RRB of responsibility for integrity functions and for the licensing of racecourses, jockeys, valets and other participants in racing is maintained. At local level, the issuing of hunter certificates, management of horse racing entries and declarations for point-to-point races will remain with the local hunt clubs. There is no change there. Amendments to the rules of racing will be subject to consultation with HRI in the context of budgetary arrangements. I must stress that HRI will not have any imprimaturover the rules of racing but it is considered appropriate for the sake of good order to have some level of consultation where rules which could have an impact on budgetary requirements are to be changed. The Bill also includes an enabling provision permitting the Minister for Agriculture, Food and the Marine to appoint persons or classes of persons to carry out all or any of the functions of authorised officers under the Animal Remedies Act 1993, subject to such conditions as the Minister deems appropriate. This provision was included at the request of the racing regulatory body.
The general scheme also provides for greater clarity on the functions of HRI, including the power to issue directives setting rules and procedures relating to its functions. There is a lack of clarity in the current legislation regarding responsibility for the administration and financial management of the Irish horse racing industry. The scheme provides for a single streamlined administrative structure within HRI for registration, licensing, financial and other functions of HRI and the RRB without compromising the integrity functions of the RRB. This will require data sharing between HRI and RRB. This streamlining measure includes the processing, but not ownership, of income from the licensing functions and registration fees for hunter certificates and trainers from point-to-points which are currently administered by the racing regulatory body. This will eliminate any need for duplication between HRI and the RRB, particularly in regard to certain administration aspects such as the registration of hunter certificates and the registration of point-to-point trainers or handlers. I stress that this relates only to the registration functions. It will also pave the way for increased efficiency in the administration of areas such as finance, IT, payroll and pensions. In the case of point-to-point meetings, however, fees for issuing hunter certificates, fixtures and entries will remain firmly with the local hunt clubs, as will responsibility for arranging such meetings.
I will speak briefly about control and accountability. The scheme provides for improved ministerial control with explicit provisions empowering the Minister to issue directions to HRI and requiring HRI to furnish information on the scope of its activities, including compliance with codes of practice or other Government policy documents, to the Minister for Agriculture, Food and the Marine when requested. There is no explicit obligation in current legislation requiring HRI to comply with the requirements of the code of practice for the governance of State bodies or for the RRB to report to HRI, and this deficiency is being addressed.

There are insufficient provisions in the current legislation, in respect of the procedure for making payments to HRI and to Bord na gCon, to allow the Minister for Agriculture, Food and the Marine to withhold financial support if he is dissatisfied with the strategic and other plans submitted to support any funding proposals or their implementation. It is proposed to provide explicit permission for the Minister to withhold funding instalments from HRI or Bord na gCon if he is dissatisfied with the strategic and other plans submitted. Funding may also be withheld where HRI or Bord na gCon have failed to provide information requested by the Minister or where they have failed to comply with a direction of the Minister. Similarly, the racing regulatory body shall be required to furnish information to HRI on its activities when requested to do so. This information may be taken into account by HRI in determining the annual budgetary requirements of the RRB.
The accounts of the RRB will be audited by the Comptroller and Auditor General and published. The chief executive of the RRB will be obliged to attend Oireachtas committees as required. There is also a provision permitting the Minister to require HRI and the RRB to agree procedures to ensure compliance with Government codes of practice, guidelines or policy documents as well as in respect of the provision of financial and other information on any matter funded by HRI. The scheme empowers HRI to make various deductions from prize money in accordance with HRI directives. This is essentially a reflection of current practice. HRI cannot make changes in the directives governing deductions for charitable funds administered by the RRB without the prior agreement of the racing regulatory body. This provision is intended to protect the status quobecause the RRB funds a number of very worthy charities from these deductions and we would not want to make any changes without full consultation.
I am aware that we have discussed some of these provisions previously and if members have any questions, I would be happy to deal with them.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank Mr. Gleeson for his presentation. The entire process has been open and helpful and it will help all of us to come to the proper decision.

Martin Heydon (Kildare South, Fine Gael)
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I thank the officials for coming before us. This is a worthwhile discussion because when they were before us, they were probably providing answers to questions we did not have at the time. We are much better briefed now that we have met the stakeholders. I wish to raise a number of questions based on the presentations we heard earlier. I ask the officials to bear with me because I hope my questions are in order.

In regard to head 2, the Turf Club pointed out in its submission that point-to-point meetings are not mentioned in existing legislation and questioned the need for their inclusion in this Bill. The method of registration currently entails applying to the hunt club for a hunter certificate, which is then registered with the Turf Club. Am I correct that the process incurs two different fees?

Mr. Brendan Gleeson:

Yes.

Martin Heydon (Kildare South, Fine Gael)
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The administration of entries to and fees for point-to-point meetings will continue to be handled locally by the hunt club. Will Mr. Gleeson clarify how much prize money will be made available for meetings? On the suggestion that the funds available to the Turf Club would be taken into account, does that include funding streams from commercial interests and areas outside of integrity services? Does it take into account historic moneys or savings on the part of the Turf Club or the hunt committee?

The racecourses suggested that it would be useful to have a proxy representative on the board. Does Mr. Gleeson envisage difficulties with such a suggestion and does the Department have an open mind on it? If their representative was unable, due to other business, to attend a board meeting, the racecourses would not be represented at the meeting. I ask for clarification on the industry services committee. Board representation was one of the main issues raised by every group we met. We have a challenge in dealing with that issue. If everyone is represented, the board could become quite large, but if we decide to choose some organisations but not others, each of them could make a valid argument as to why it should have full representation. The Turf Club referred to the UK Horsemen's Group, which is an umbrella body. Could the industry services committee play an equivalent role?

Head 4(1) inserts a Schedule which refers at 7.(1)(f) to stable employees. Head 6(2) inserts an amended section 20 in the 1994 Act which in subsection (3)(c) deals with people directly employed in the industry but stable employees are not explicitly named. The jockeys made a compelling case that they should not be lumped in with people who are directly employed, such as stable staff, because they would not necessarily face the same issues. I am conscious that thousands of people are employed as stable staff and want to ensure they are explicitly represented. The anomaly between the two heads might be investigated.

In regard to head 5, the Turf Club took the view that it went beyond the Indecon and Smith & Williamson reports. It also pointed out that stall handlers and photo finish staff are under HRI and suggested this meant it would be able to bring in those staff if questions arose around rules of racing. Is that the case and, if so, can Mr. Gleeson suggest a way around it? The Turf Club indicated that it was keen for this area to come under its responsibility.

The Turf Club also proposed that the racing regulatory body be funded directly by the Department on a multi-annual basis, or at least retain a minimum of financial independence. The first part of that recommendation would go against the principles set out in the heads. Does Mr. Gleeson see any possibility of implementing such a funding structure and what argument would he make against funding the body directly through a separate stream?

I ask for clarification on the media rights committee. Can the committee bring in people from the outside who are not board members and was that the case in the past?

A number of concerns were expressed about how the HRI might issue directives. The racing regulatory body asked why they are called directives rather than terms of trade or something similar. It argued that the meaning and legal status of a directive is unclear and that there cannot be two rule-making bodies for the sport. Can further clarity be provided in the regulation in regard to directives?

Pat O'Neill (Fine Gael)
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We have discussed the legislation comprehensively with the stakeholders. The biggest issue for stakeholders is the make-up of the board, which is being reduced from 13 to 12 members, with the Minister to appoint three members. I suggest that we make a recommendation to the Department on this issue because some of the stakeholders feel they are being left out of the system by not getting a place on the board. I welcome Mr. Gleeson's comment that Indecon had indicated the number should be reduced from 13 to 12. Does he envisage the board being increased by two to 14 or 15 members in order that all stakeholders can be represented? This is an important industry and everyone should have a say on the board of HRI.

Mr. Brendan Gleeson:

The Members asked a number of questions and I will try to address all of them. The first question related to point-to-point meetings and how they will operate. We are very sensitive to local input and volunteerism in point-to-point meetings.

We are aware that is a highly sensitive issue and we think there are sufficient safeguards in the general scheme to protect that.

I wish to indicate how point-to-point racing works at the moment. HRI provides about €1.5 million to point-to-point racing. That goes towards the provision of prize money. There is a grant of about €2,500 per fixture as I understand it and €500,000 goes to the National Hunt Club for integrity services at point-to-point events. I wish to focus on the change with regard to point-to-point racing. The only change in the HRI role on point-to-point racing proposed in the general scheme is that the registration functions of hunter certificates and participants in point-to-point steeplechase races will be carried out along with all other registration functions within HRI. That is entirely separate from the issue of hunter certificates and the acceptance of horseracing entries.

Those functions have always resided with the local hunt clubs and the funding associated with those functions resides with the hunt clubs. That is the issue of the certificates and the acceptance of race entries. There will be no change in that. From the perspective of the person on the ground organising a point-to-point event there will be no visible change. We are talking about streamlining a registration function. The fees from the registration functions will be streamlined into an administrative system in HRI with no change on the ground. There is no change in the issue of hunter certificates, the acceptance of horse race entries or in the arrangement of those point-to-point events. That is a very important point to clarify.

The Deputy also spoke about the funding. Perhaps the question of the direct funding from the Department can also be dealt with here. It has always been the case that we have had a cascade of funding from the Department to HRI to the Turf Club. HRI is a State body established for the purposes of administering horseracing. It is entirely appropriate to have this cascade of funding to other relevant bodies from HRI. We would not consider it appropriate to change that. Within that, of course, we must be careful to protect the independence of the integrity function. The general scheme provides for a number of checks and balances. The first is through the composition of the board as proposed. The board has three Turf Club members, three ministerial nominees and a broad range of representatives of the racing sector. An important balance is struck in the composition of the board to ensure that integrity functions are carried out correctly.

In the context of seeking funding from HRI - this is €5 million, €6 million or €7 million of taxpayers' money - HRI will be able to take into account funding streams to Turf Club deriving from its statutory functions regarding integrity and only in regard to those statutory functions.

We need to consider what structure we have at the moment. We have a very unusual governance structure here. We are not starting with a blank page. We have a State agency which administers racing and what is essentially a private body. The private body for the purpose of this legislation carries out certain statutory functions. In the context of carrying those statutory functions it is called the Racing Regulatory Body.

In its private capacity the Turf Club may well carry on all kinds of activities. It may run racecourses, it may rent gallops, it may establish hotels and it may have interests in commercial enterprises. That is not what we are discussing here. All we are saying is that when determining how much taxpayers' money the racing regulatory body needs to carry out integrity functions provided for by statute, we must take account - it would be bizarre not to take account - of funding deriving from the exercise of those functions. To be crystal clear about this, the Turf Club's private funding in its capacity as a private club is not affected here at all. We are only talking about taking into account the funding deriving from the statutory functions it carries out here. That is a very important point.

The Deputy mentioned proxy members of a State board. While it is possible to do that, personally I do not think that is appropriate. I believe that if a person is appointed to a State board, it is a very serious position. We need continuity and an appreciation of what went on at previous meetings. For the sake of good order I think an appointee to a board is an appointee to a board. I would be absolutely opposed to the idea that when one engages in something as serious as participating on a State board that one could bring a proxy along. It is not like voting at a company's shareholders' meeting; this is a different kind of engagement. Board members engage on a range of policy issues that require continuity from meeting to meeting. That is my position on the question of proxies.

The Deputy mentioned the industry services committee. Indecon recognises that many strengths derive from having a representative board. Equally when we look at international best practice generally and not just among State agencies, there is broad recognition that smaller boards tend to function more effectively.

What we have included in the general scheme is not arbitrary. It is based on an exercise conducted by Indecon involving broad consultation and an examination of international best practice. What is in our general scheme is reflective of the conclusions that Indecon reached. It is always the case with a representative board that everybody wants to be represented; that is inevitable. So we try to strike an appropriate balance between representation and effective running of a board.

The industry services committee is a new vehicle, representing jockeys, stable staff, permanent staff and staff in the industry. The representation mechanism there is that its chairman will serve on the board. There is representation for jockeys and qualified riders, persons employed in the horseracing industry and persons employed directly in the horseracing industry. That group will have its own committee for the first time. It will elect its own chairman, who will serve on the board. So there will be representation on the board for those people.

Martin Heydon (Kildare South, Fine Gael)
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My point is that head 6.3(c) refers to persons employed directly in the horseracing industry. In head 4 it is specifically referenced as stable staff. That might be taken on board in the final drafting because it is an important distinction.

Mr. Brendan Gleeson:

Absolutely. They are intended to be comprehended in the wording that is there. However, I accept there is an inconsistency between the two heads. We will ensure they are specifically referenced. Obviously if that is part of the report emanating from the committee we will take it on board.

The Deputy asked me a very specific question about stallholders.

The provision in the 2001 Act on stallholders has not changed, with regard to the provision and maintenance of mobile track equipment including starting stalls, photo finishes, camera control equipment and any other such equipment agreed from time to time between Horse Racing Ireland and the racing regulatory body to provide the racing regulatory body with photographs, films, sound recordings and other connected materials or the data generated. The functions relating to stallholders have also resided with Horse Racing Ireland and there is no proposal to change this.

Martin Heydon (Kildare South, Fine Gael)
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Does the proposal not include a change under head 5(k) from providing and maintaining mobile track equipment to providing, maintaining and operating such equipment? The Turf Club stated it is not ideal because photo finish staff as well as stall handlers are included and if an integrity issue arises it cannot question them. Is this the case? Is this a potential anomaly?

Mr. Brendan Gleeson:

I am advised the word "operating" is a reflection of current practice. It is how it has always been done and was provided for in the 2001 Act. It is a new word but a reflection of current practice and it is not our intention to change it.

I have dealt with the question of the financial independence of the racing regulatory body. With regard to the cascade of accountability and whether the racing regulatory body should receive funding directly from the Department, I do not believe it should. No change is proposed in this regard in the draft scheme. In any delegation of functions from a Department on the establishment of a State agency there is a cascade of accountability. What we have provided for here is a strengthening of existing provisions but no fundamental change in the cascade and this is appropriate.

Andrew Doyle (Wicklow, Fine Gael)
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Senator O'Neill raised an issue.

Pat O'Neill (Fine Gael)
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Mr. Gleeson dealt with it in his response to Deputy Heydon. The Department feels a smaller committee works more efficiently.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Many consultants seem to get big money for a proposal which becomes a fashion, but then fashions change and magic numbers coming in. Other than that some people irrationally think 13 is an unlucky number does it make a significant difference if the board has 13 or 14 members rather than 12? An argument can be made for each of these. Board members are nominated by interests, apart from the three nominated by the Minister. We recently had a farcical situation where a board had 19 or 20 members but only five people wound up making the big decision because everyone else had been put outside the door for one reason or another. How wedded is the Department to this magic 12 or is it a give or take figure?

One quarter of the seats on the board will be given to a group called the Turf Club which carries out statutory functions under the Act. This Turf Club is a self-perpetuating private body which does not have open membership, and it is not possible for anybody who wants to get in to do so if he or she is not chosen by those who are already in it. In the interests of openness, transparency and citizens' rights, which are all things we aspire to in a properly functioning republic, would it not be appropriate to oblige the Turf Club to have an open system of membership before it is given statutory functions and three seats on the board? How can the Department justify giving a private body whose membership is self-perpetuating, in other words existing members invite new members, and from which ordinary people are excluded if they are not part of the great and good clique and invited by the membership, are given statutory functions and three seats on the board? How can the Department justify this, given the present thinking on good governance, openness and citizens rights?

Willie Penrose (Longford-Westmeath, Labour)
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Much work is being done by the Association of Irish Racecourses. One of the proposals is that Horse Racing Ireland will be omnipotent with total control of everything. Many people at the Department do not understand that the HRI is a runaway train with regard to charges, and I have made this point before. It was stated that point to points will be examined. At least with point to points if we are charged we know what we are getting and there is an end result. Ordinary folk give up their Saturdays and Sundays to work on a voluntary basis at point-to-point courses. We know money is invested in trying to improve them. If Horse Racing Ireland has the financial management of all aspects of Irish racing there is a concern it will examine the finances of racecourses. HRI has ownership and control of racecourses and allocates programmes and fixtures. How much more power will be given to this body? We should circumscribe some of its powers.

I gave many examples and was amazed by the reaction of many ordinary people trying to breed horses, particularly with regard to national hunt. Not everybody is successful. They cannot all go to Goffs to bid €2 million or €3 million. Many people there are glad to get something for €3,000 or €4,000. The next minute, they are loaded out with charges. I am concerned that giving HRI all of this power will create a runaway train where one will not have any choice and there will be no haggling. It will lay down the law. The sinecures within it are not too bad.

The racecourse beside me in Kilbeggan is very well run and a tight ship. According to the proposed section 10(1)(m) negotiation of all income from media rights will be given to Horse Racing Ireland. The media rights do not belong to Horse Racing Ireland but to the actual racecourses. Why should Horse Racing Ireland poke its nose in? Where will it end? If there were no media rights there would be no races. If Sky was not putting in a few shillings there would be no prize funds. Until now Horse Racing Ireland and the Association of Irish Racecourses have been jointly involved in the negotiation of media rights. Will Horse Racing Ireland subsume all of this function to itself?

Racecourses have struggled through very difficult times, survived and carried out improvements, although I acknowledge that this came with State investment. It has been for the benefit of ordinary patrons and people who are not multimillionaires; very often, pensioners can avail of a reduced rate in going to the courses. The Association of Irish Racecourses has indicated its concern, although it acknowledges that Horse Racing Ireland, HRI, has a function in negotiating income from media rights belonging to that body. It also has legal rights to negotiate income derived from third parties, which takes in racecourses. In the 1994 Act, such a process was vested in the racecourses under section 61. I hope that what has happened up to now will continue, with at least joint consultation being evident. It is extremely important. What is the witnesses' view and will they provide an assurance that racecourse interests will not have their interests dispensed with? HRI has much strength with regard to fixture allocation for racecourses and so on.

Thomas Pringle (Donegal South West, Independent)
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I will speak to the integrity functions. I take on board the comments regarding payments and fees going through HRI before being passed to the regulatory body. HRI has a statutory function to promote racing and the regulatory body has a function to control racing, and there may be times when the bodies would clash or have different interests. Could the potential be minimised that HRI would restrict funding for integrity services in a way that would inhibit the integrity of racing? Will the witnesses comment on how the Bill will balance those ideas?

With the definitions given in head No. 2, the Turf Club has asked that "integrity service" would be amended to included integrity services provided away from racecourses which are not specifically related to the running of particular races or fixtures. What is the Department's view on such an amendment of the definition? It could be quite important. There would be an obligation on the regulatory body to consult with HRI around the rules of racing. Consulting would encompass taking in views but there would be no obligation to implement such views. Could this be clarified?

Mr. Brendan Gleeson:

The first question concerned the status of the Turf Club and the conferring of statutory functions on a private body. We are not starting from a blank page with horse racing in Ireland and we are dealing with a long tradition of 150 years of the Turf Club, which has performed integrity functions in a way that has brought a degree of credit to the industry in Ireland, which is very highly regarded. Since 1994 we have developed a State body for developing the industry as apart from being a sport, it is a very important industry that provides 17,000 jobs, with exports exceeding €200 million and output of €1 billion.

The general scheme would not confer new functions on the Turf Club and these are the functions it has always had. For a considerable period, it has had the functions on the basis of statutory provision. The general scheme would bring the Turf Club within a tighter governance structure, so its finances can be examined in the context of determining what kind of funding is required for integrity processes. I take the Deputy's point of principle. The Department does not control the internal processes of the Turf Club and it does not intend to do so. Nevertheless, we are not starting from a blank page and we have a well-established structure which has served the industry well.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It is very easy with various bodies that have been technically private to raise the condition of recognition by the State of open membership and not having a self-perpetuating club. One could say that this is the way it is. Other elements of the Turf Club are being changed, including finance reporting and so on, as the world changes and it is not the same now as it was 150 years ago. That was much more paternalistic. In 2014, it is inappropriate that a club with a closed membership - it is by invitation only - is being given statutory functions when one line in a Bill could force it to make the membership application process more open.

Andrew Doyle (Wicklow, Fine Gael)
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That is a point but the witnesses have responded as they see it. It is not proposed to do that in the legislation.

Mr. Brendan Gleeson:

No. Deputies mentioned the size of boards but all I can do is present the facts and reasons we selected board sizes as provided for in the general scheme. It is not an arbitrary figure and is based on recommendations by Indecon. Its work was based on a series of consultations and the examination of best practice. That is the basis on which we picked the number and how we decided the proposed composition of the board. The committee will have its own views on the composition and size of the board and we will have to consider any alternative view arises in the report from the committee. The figure arose from work done in examining the question very deeply.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The figure was proposed by Indecon. I take it that company argued that a figure of 11 or 13 would be very different. Was the company very specific in saying the number had to 12 and not 11 or 13? Is it a magic figure?

Mr. Brendan Gleeson:

Indecon was commissioned to examine the structures and it produced a recommendation. We have taken the recommendation on board.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It has recommended the specific number.

Mr. Brendan Gleeson:

Precisely. The recommendation also took in the composition of the board. The committee may have a different view and we can consider that in time.

Willie Penrose (Longford-Westmeath, Labour)
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That is the point I made. We have spent many hours listening to comments from people involved in the industry. It is a different process to that used by Indecon. What is the status of our recommendations regarding the general heads of the Bill? Will the report be binned or properly evaluated?

Andrew Doyle (Wicklow, Fine Gael)
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It is as good a time as any to clarify that point. We will finalise this matter soon as we are under a certain amount of pressure. We intend filing a report on all the contributions and although we have not yet concluded, we will make some recommendations. We do not have to do so but it will happen. What will be the status of the report when it hits the desks in the Department?

Mr. Brendan Gleeson:

It will not just be a matter for the Department and there is a broader question. We have gone through a very valuable process and we will probably end up with something slightly better than what we proposed originally. The Department will receive a report and we will consider it.

If, as a result of the report, we are required to change the heads in a substantial way, the Bill will have to go back to the Government and then for drafting. Clearly, it is something that will be sent by the committee to the Department which will have to consider it seriously. We have been through a serious process and a series of consultations here.

Andrew Doyle (Wicklow, Fine Gael)
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Deputy Willie Penrose had questions about the power and influence of HRI.

Mr. Brendan Gleeson:

Yes and we discussed the issue of media rights also. To be clear, we are not starting with a blank page. HRI is the State agency which has been established to administer and develop the horse racing industry. It has been established since 2001 when it replaced the Irish Horseracing Authority. In terms of media rights, there is no provision to change them, with one exception, the sole exception being that the media rights committee will now be at liberty to bring in non-members of HRI to advise it. This is based on the recognition that one might require particular commercial, media or other expertise to inform media rights. The number of members of the media rights committee is increasing from three to five to accommodate potential additional members.

The Deputy is correct that there is a joint approach to media rights between the racecourses and HRI and that will not change. Racecourses are still represented on the HRI board. As I understand it, the racecourses own the media rights but on the basis of an agreement. It was considered that, from a national perspective and the point of view of developing an industry and getting the best bang for one's buck, the media rights should be negotiated as a collective. Nothing has happened in recent times to change that view.

The Deputy spoke about the HRI charges. I understand the charges have been reduced by 10% this year.

Willie Penrose (Longford-Westmeath, Labour)
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They have, after the publicity generated. They should be pared back more.

Mr. Brendan Gleeson:

That is fine; the Deputy has a point. In fact, the streamlining provided for in the Bill should result in reducing the overall cost of administering the horse racing industry. It could well allow scope for a further reduction in charges to participants in horse racing, which would be a desirable outcome. However, these are matters for HRI, not the Department. It is a day-to-day operational matter, but the framework laid down in the general scheme should allow for a reduction in administrative costs which could certainly manifest itself in reduced charges to the industry.

Deputy Thomas Pringle asked about the financing and the protections for the integrity function and the independence of the integrity function. I have already spoken about the general checks and balances in terms of the composition of boards and so forth. However, there is a unique feature in this legislation. When the RRB negotiates its budget with HRI and if there is a fundamental disagreement on the budget, the legislation provides for an arbitration procedure. That is a very unusual provision. In any other circumstance I would almost say it is inappropriate, but it is included specifically in recognition of the need for absolute independence in terms of integrity. First, there is a representative board which obviously has a say in the negotiation of budgets. There are three RRB people on the board, three ministerial nominees and representatives from across the spectrum of interests in horse racing. There is also the specific arbitration clause which has always been there. If there is a disagreement between RRB and HRI in the budgetary negotiations at the start of the year, an arbitrator can be called in. That provision has always been included, but it has never been invoked. It is inevitable and probably appropriate that there will be tension between two negotiating bodies when budgets are being negotiated. That is to be expected and probably a sign of a healthy process, but we have this arbitration provision. It has never been used, but it is still in place.

Thomas Pringle (Donegal South West, Independent)
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Is it binding?

Mr. Brendan Gleeson:

It is.

Thomas Pringle (Donegal South West, Independent)
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It has never been used.

Mr. Brendan Gleeson:

It has never been used.

Thomas Pringle (Donegal South West, Independent)
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What about the consultation process?

Mr. Brendan Gleeson:

What the Deputy has said is correct. Consultation means consultation; it does not mean anything else. It is appropriate that if one is changing the rules of racing, one consults bodies or stakeholders that might be affected by it. That is a sign of a healthy process. However, consultation does not mean that they have an imprimatur over the outcome.

Thomas Pringle (Donegal South West, Independent)
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I had a question about the definition of integrity functions.

Mr. Brendan Gleeson:

We have reflected on that issue. It comes back to what Deputy Éamon Ó Cuív said. This is a very unusual situation where what is essentially a private body has a range of statutory functions. What is being discussed is providing very broad, strong policing powers for a private body, around which there are sensitivities. First, there has been no change to the definition. We consider it appropriate that the Turf Club have these powers around the tracks and in the context of applying integrity to racecourses. Where work is required outside these parameters, we have the Garda and departmental investigators who frequently work cheek by jowl with Turf Club personnel to examine matters such as breaches of animal remedies regulations. They have all of the necessary powers and authorisations to do what the Turf Club is seeking to do outside the tracks. It is a balancing act. Is it appropriate to expand the remit of the Turf Club beyond the tracks? I have some doubts about the wisdom or even the legal propriety of giving a private body these very strong policing powers outside its strict remit, as provided for within the regulations. This is something we considered and what I am saying reflects the view of our legal services division.

Thomas Pringle (Donegal South West, Independent)
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Surely the more agencies that are involved in the integrity function, the more difficult it is to manage it effectively.

Mr. Brendan Gleeson:

That is a perspective. In practice, the reality is that when things happen off-track, they are generally done in collaboration with the Department. We have investigations personnel who are empowered under various individual legislative measures to do the types of thing the Turf Club is as anxious to do off-track. That system works well in practice.

Anthony Lawlor (Kildare North, Fine Gael)
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I thank the Chairman for allowing me to ask questions. The entire process has been enlightening not only for members but also for members of the public who are watching these proceedings and those who made submissions.

Mr. Gleeson indicated that before the pre-legislative stage, he had had a number of meetings with various bodies. Will he identify these bodies? How many meetings did he have with HRI and how many meetings did he have with the Racing Regulatory Body?

With regard to the Indecon report, as Deputy Martin Heydon said, there is no mention in it of point to point meetings, yet it is an integral part of the legislation. There is a change in this legislation. Mr. Gleeson has also mentioned that there is no need for change with regard to the regulatory body's role in stall handling, photo finishes and so forth, and that it does not have a role in bringing in those persons whom it might wish to query. Such a change would be very helpful in the regulation of the body. Perhaps he might change that provision to bring it more within the role of the regulatory body.

There will be 13 members of the board. They include four members appointed by the Minister, the fourth member being the chairman of the board. Will Mr. Gleeson clarify if that is the case?

I agree with Deputy Penrose that media rights will be a huge aspect of funding for the racing industry into the future. Media rights have been legally proven to be part and parcel of the ownership of racetracks. I ask that a change be made to head 6(3)(2).

Andrew Doyle (Wicklow, Fine Gael)
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Just to be clear, the Deputy can ask whether a change can be made, but he cannot make a recommendation here today.

Anthony Lawlor (Kildare North, Fine Gael)
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All right. I want to know whether a change can be made.

Andrew Doyle (Wicklow, Fine Gael)
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I rule the Deputy's first question out of order because the number of meetings held is not part of the general scheme of the Bill. His question has nothing to do with the purpose of today's meeting. He can ask Departmental officials a question through other channels, but not here.

Anthony Lawlor (Kildare North, Fine Gael)
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It would be interesting to find out the information.

Andrew Doyle (Wicklow, Fine Gael)
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I have accommodated the Deputy and did so in good spirit. However, his query is outside the realm and responsibility of this committee's role and function.

Anthony Lawlor (Kildare North, Fine Gael)
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I shall rephrase my question on head 6(3)(2), which reads: "The media rights committee shall consist of no more than 5 members appointed by HRI and may include members who are not members of HRI." Can the Department, before the legislation is brought before the Dáil, consider replacing the word "may" with the word "should"? There is a fear that conflict between the HRI and racecourses may arise some time in the future, particularly for racecourses not owned by the HRI. There should also be outside members rather than members of HRI, if possible.

It is strange that while the Racing Regulatory Body must engage in consultation, HRI can issue directives on the rules of racing and integrity. Can we change that situation? Is it possible for the Department to ensure the HRI must consult as well as issue directives? If so, instead of one telling the other what to do, both would have to consult.

Part of the intention of this Bill, following the Indecon report, is to achieve streamlining and savings. I asked the HRI about such matters, but it could not indicate how many people would be let go or where savings would be made. Can the Department indicate where savings will take place and how long the process will last?

We still have not received 2013 annual report from HRI. Is the Department happy with that situation?

Andrew Doyle (Wicklow, Fine Gael)
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The Deputy has strayed outside the role of this committee. Other members of the committee have stuck to the task of scrutinising the general scheme.

Anthony Lawlor (Kildare North, Fine Gael)
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I asked about streamlining, funding and savings.

Andrew Doyle (Wicklow, Fine Gael)
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The Deputy is being creative with his arguments. His question is not really appropriate. We have an Indecon report looking at the whole industry. I accept the Deputy's question on consultation and directives, in which he sought for their meaning to be clarified. We are dealing with the general operational rules of racing, which is the overarching direction that racing should take as a directive. Everybody works within this - HRI, the regulatory body and anybody else. The directive also concerns animal welfare, betting, propriety and lots of other things. I agree with the Deputy that it needs to be clarified, but I do not think his query about the annual report is relevant to today's discussion, with all due respect.

Anthony Lawlor (Kildare North, Fine Gael)
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The Bill is on Horse Racing Ireland.

Andrew Doyle (Wicklow, Fine Gael)
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We are discussing the general scheme.

Anthony Lawlor (Kildare North, Fine Gael)
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Surely part of the general scheme is an annual report.

Andrew Doyle (Wicklow, Fine Gael)
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I do not agree. We are here to discuss the general scheme of this Bill.

Anthony Lawlor (Kildare North, Fine Gael)
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All right. I will use another method to ask my questions at some other time. I thank the Chairman and the officials.

Paul Bradford (Independent)
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I am very supportive of both the themes and the tone of Deputy Lawlor's contribution and will not harrow the ground that he has ploughed.

I shall make one or two observations. Mr. Gleeson used a fascinating phrase when talking about point-to-point racing. He said that for all intents and purposes there would be a perception of no change. Normally, politicians talk about perception and people on the other side of the table talk about reality. I can see there may be no perception of any significant change, but change will come about as a result of this scheme. Why is the point-to-point sphere and sector in the scheme at all? The sector is working well and without it we would not have National Hunt industry. The sector is not broken so I am not sure why we are attempting to fix it. I ask Mr. Gleeson to comment further on the matter.

Integrity, services and the regulatory body have already been covered. The Racing Regulatory Body gave us a very powerful presentation a month or so ago at which its representatives asked very serious questions about ensuring its independence into the future. Can the Department be categorical, from the point of view of the integrity body, in stating that there will be no change? Can it confirm that the RRB will retain its full powers and flexibility, as heretofore?

If I was the Minister presiding over and assisting, by way of financial support, an industry as big as the Irish horse racing industry, then it would be very neat and tidy, from my perspective, to have all power and responsibility channelled into the HRI. The move would simply make my job much easier. However, the current balance between the HRI and the regulatory body works quite well and I would not like to see it rebalanced to any significant degree. Therefore, I am supportive of what the previous speaker said.

I ask Mr. Gleeson to reflect again on the whole issue of the point-to-point industry. Perception or not, there will be a change, and I am worried that it might have an impact on how the point-to-point sphere currently works in terms of volunteerism, local meets and the spirit of country enterprise, which is at the core of its success.

Mr. Brendan Gleeson:

I thank both Deputies. First I will deal with the question on point-to-points and the lack of reference to them by Indecon. To be clear, we had an Indecon report that made a broad range of recommendations about the administration of horse racing, governance, finances and a number of other issues. After Indecon, a committee comprising members of the Racing Regulatory Body and the HRI was established. They commissioned Smith & Williamson to compile a report on how the administration of the system might be streamlined. Although it is true that there is no explicit reference to point-to-points in Indecon, it is implicit in the whole idea of streamlining. There is an explicit reference to point-to-points in the report by Smith & Williamson. What we have proposed in the general scheme is precisely what was proposed in that report, which is to move the registration functions - and only the registration functions - to HRI, which already has registration functions across a range of other areas.

I can confirm to Deputy Bradford that I used the word "perception". The reason for doing so was that there is a perception that what is happening here will interfere with volunteerism and with the way point-to-points are run at local level. I shall remove the word "perception" now and state that there will be no change to the running of point-to-points at local level as a result of what we are proposing here.

Paul Bradford (Independent)
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Apart from the registration of the horses running.

Mr. Brendan Gleeson:

Only the registration. It means that the money handed over - which does not go back to local hunt clubs anyway - will now be handled through a single administrative stream. The funding for the local hunt clubs, which is done through the issuing of certificates and taking in of fees from participants, will be handled in the same way as it has always has been. It will stay with the hunt clubs in the same way it always has done.

There will be no change to the running of point-to-points as a result of this general scheme. I have removed the word "perception", which I think the Deputy was worried about.

Andrew Doyle (Wicklow, Fine Gael)
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What about the consultation and directives?

Mr. Brendan Gleeson:

There are two provisions. First, the Racing Regulatory Body is solely and independently responsible for establishing the rules of racing. In the context of establishing the rules of racing, my understanding is that it consults with various bodies anyway, because that is a sensible thing to do in any process. That does not mean it is bound by those bodies. There is a specific provision in the general scheme that when it is amending the rules of racing the RRB should consult with HRI. HRI has directives across a range of its own functions. They exist anyway; that is the reality. The directives are circumscribed in the general scheme to the functions of HRI. The directives should not impinge on the rules of racing, and if there is consultation one way when the rules of racing are being amended, it would not be impossible to provide for some sort of a consultative procedure the other way if directives are being amended. I point to the checks and balances that are inherent in the HRI structure. We have the Turf Club, ministerial nominees, and a broad range of representative organisations on the HRI board. When we talk about HRI doing something, we are talking about the board doing something. It is the board that has authority to do these things. The board is structured to allow for a balance of representation, and the checks and balances are in there.

Andrew Doyle (Wicklow, Fine Gael)
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To correct the record, it is the Racing Regulatory Body that sets the rules of racing. I think Mr. Gleeson said HRI.

Mr. Brendan Gleeson:

Apologies. That was a Freudian slip. It was both correct and-----

Andrew Doyle (Wicklow, Fine Gael)
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I thought we had better get that one right on the transcripts.

Anthony Lawlor (Kildare North, Fine Gael)
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Can I ask about the savings?

Andrew Doyle (Wicklow, Fine Gael)
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Yes; I am coming to that.

Anthony Lawlor (Kildare North, Fine Gael)
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Sorry.

Mr. Brendan Gleeson:

On the question of savings, the first thing is that we are providing for a framework. When we have concluded this process, in all its complexity, and we have come up with a Bill that will hopefully provide a framework for things to work better, people will still have to work together and get into the detail of operating and administering horse racing. I just want to make that point. This Bill does not answer all the questions.

On the issue of streamlining, I am reading a piece from Smith & Williamson. It discusses shared IT services, a single income stream, and a shared registration system. It discusses a joint payroll and HR function. There is a list of areas here where Smith & Williamson recommended that there should be streamlining. We are not providing for all these things in the legislation, but we are providing for a single income stream, which will be a contributor to this overall effort. If one has two buildings and two administrative systems located a mile and a half from each other on the Curragh, it is self-evident that if one streamlines those in some way and if one provides for a single accounts system, IT system and HR system, there will be savings. Those savings will accrue to the industry because none of the parties in this are in it for themselves. None of these bodies are profit-making, so any financial benefits to HRI and the Turf Club, one can reasonably assume, will ultimately be felt by participants in the industry. I do not think there is any doubt, and while I might have difficulty in quantifying precisely the savings that will accrue from the streamlining, it is self-evident that there will be savings.

These are issues to be managed between HRI and the RRB following this legislation. It will be a good thing, because there is uncertainty about this at the moment. It seems that when we have got through this process, when the legislation is on the Statute Book, people will still have a job to do. They will still have to engage in the best interests of horse-racing, and I expect that they will do that.

Andrew Doyle (Wicklow, Fine Gael)
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Media rights are something we could consider. The explanatory note in the document states: "[S]ubhead (3) increases the membership of the media rights committee to 5 and permits non-members of HRI to be members of the committee".

Anthony Lawlor (Kildare North, Fine Gael)
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It would depend on the board itself. One hopes that common sense might prevail, but it does not always.

Andrew Doyle (Wicklow, Fine Gael)
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It does allow this and it streamlines. The provision brings the number of members on all the statutory committees of HRI up to five members, or down, whichever is the case. That is precisely what is happening.

Mr. Brendan Gleeson:

I know I have repeated this a number of times, but I must mention the representative nature of the board. The Minister will now have, as the Chairman has correctly pointed out, four members - the Chairman and the three members of the board. The Racing Regulatory Body will have three members on the board. There is a strong governance structure there and it does provide the checks and balances needed to ensure that these sub-committees function reasonably well. That is a relevant consideration.

Andrew Doyle (Wicklow, Fine Gael)
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We are not trying to pre-empt what the committee will say. I think - and I believe Deputy Heydon will agree with this - there should be a recommendation that if the board is restricted to 12, the standing committees would, where possible, have non-members from the representative organisations as a feed-in and that the chair of each committee would actually be a member of the board and do his or her job accordingly and represent the relevant committee on the board in the interests of streamlining. I do not think the Deputy would disagree on that as a recommendation that may emanate. I must be careful what I say will happen, but I can anticipate that may well be one of them.

Anthony Lawlor (Kildare North, Fine Gael)
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That would be either a statutory instrument or part of the legislation itself.

Andrew Doyle (Wicklow, Fine Gael)
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Are we done?

Anthony Lawlor (Kildare North, Fine Gael)
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Deputy Heydon has also mentioned areas of racing that are not under the remit of the regulatory body at the moment, such as stall-handlers and the people who operate the photo finish. It would make sense if everything associated with the race - everything before the horse goes into the stall, everything during the race, and everything afterwards - were associated with the regulatory body. There are two parts: the starting of the race, with the stall-handlers and so on, and the photo finish. It would be common sense to bring them all in under the regulatory body.

Andrew Doyle (Wicklow, Fine Gael)
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On that point, was there any reference to that in the Smith & Williamson report? I must confess I am not aware of it.

Mr. Brendan Gleeson:

I have dealt with this. I will not take a view on that proposal, but I will say that the provisions in the general scheme are based on provisions that were introduced in 2001. It has been that way since 2001. I am not aware that there is any particular problem or issue with it, so it is not something we have proposed.

Andrew Doyle (Wicklow, Fine Gael)
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I thank the officials for attending this meeting and for their presentations and for responding to questions. I hope members and non-members understand that I am bound by what the general scheme entails. There are questions which, whether I want them answered or not, I cannot permit to be answered here. That concludes our proceedings.