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.