Mr. Seamus McCarthy:

Gross expenditure under the Vote for Environment, Community and Local Government was €1.1 billion in 2013, down 8% on the previous year. A total of 92% of the expenditure fell under the housing, water services and community and rural development programmes. At programme level, the most significant reduction year-on-year was in the area of housing, where spending fell by €94 million compared to 2012. The provision for the housing programme in 2013 was almost €77 million, or 11%, less than the previous year’s outturn. In addition, expenditure in 2013 was almost €17 million or 3% less than the amount provided. The underspend in the year was attributed primarily to a lower than expected take-up by approved housing bodies of funding available under the capital assistance and capital advance leasing facility schemes.

Spending under the Vote on the water services programme was almost €52 million less than provided in the Estimate. This was attributed to difficulties encountered by contractors in securing necessary bonds, issues with contributions from local authorities to project costs and a need to progress the water sector reform programme. As the committee is aware, responsibility for the funding of most water services passed to Irish Water with effect from 1 January 2014.

The main receipts recorded in the 2013 appropriation account were €62 million provided by the EU under the LEADER rural economy sub-programme and treated as appropriations in aid of the Vote and €43 million of extra Exchequer receipts under the EU emissions trading scheme. The net surplus on the Vote at the end of 2013 amounted to €120 million. With the approval of the Minister for Finance, capital funding of €72 million not spent in 2013 was carried over to 2014. The remaining €48 million was duly surrendered to the Exchequer.

My audit certificate refers to three chapters in my report on the accounts of the public services related to the Vote. In February last, the Committee examined the chapters dealing with matters related to water services and the land aggregation scheme.

As in previous years, chapter 5 was compiled to present an overview of the level of funding provided by central Government to local authorities and the purposes for which that funding is provided. Relevant information has to be drawn together from a number of accounts to get a full picture of the transfers and of trends over time. In 2013, transfers of funding from central Government sources to local authorities totalled around €2.4 billion. The bulk of the transfers came from the local government fund, Vote 25, Environment, Community and Local Government and Vote 31, Transport, Tourism and Sport. The local government fund, which is also administered by the Department, was financed mainly by motor tax receipts, which totalled €1.1 billion in the year.

Central Government transfers to local authorities in 2013 represented just over 40 % of the figure for 2008 when transfers peaked at around €5.8 billion. That decline reflects both the overall reduction in public expenditure since 2008 and the transfer of certain responsibilities from local authorities. The reduction in transfers has impacted on local authority capital spending in particular.

Special report number 84 was completed in July 2014. The report is the result of an initiative under which national audit offices in eight EU member states, including my own office, carried out coordinated audits of the implementation and enforcement of the 2006 European Waste Shipment Regulation, which sets out the rules for cross-border shipment of waste within, to and from the EU area.

The regulation covers classification of all types of waste, a system for licensing carriers and the notification of waste movements, as well as an inspection and enforcement regime for waste handling and transport facilities.

Under the regulation, the Department has overall policy responsibility for waste management. It assigned overall responsibility for implementation of the regulation in Ireland to Dublin City Council, effectively giving the council a national remit. The council has established the National Transfrontier Shipment Office, NTFSO, to implement and enforce the regulation and that office has contracted out certain aspects of the enforcement regime to a private sector service provider.

The co-ordinated audit established that, in terms of the structures and resources available for enforcement, Ireland compared favourably relative to other states. It was the only one of the states examined to have established a dedicated national implementation and enforcement body. Ireland ranked second highest of the eight countries examined in terms of the number of inspections carried out at waste facilities and ports. However, the number of inspections has fallen significantly. The 3,200 inspections carried out in 2013 represented a 35% decrease on the peak level of 4,900 inspections in 2011. We also found that the rate of detection of infringements during inspections of waste imports and exports had fallen from 16% in 2012 to 6% in 2013. It is unclear whether the decline is due to improved compliance or less effective inspections.

The regulation requires member states to implement an effective system to penalise infringements. In comparison with other countries, it was found that Ireland issued a relatively large number of warning letters in respect of minor infringements. However, the number of infringements leading to fines or legal actions was relatively low. The report recommends that, in addition to its risk-based inspections, the NTFSO carry out sufficient random checks and use the results to estimate the overall level of compliance with the waste shipment regulation. It also recommends that the Department ensure an enforcement strategy is developed to set the strategic direction for enforcement activity over a three to five year timeline.

The special report also deals with a programme in which the State is engaged to repatriate a significant volume of waste, originating south of the Border, that was dumped in 16 illegal waste sites in Northern Ireland between 2002 and 2004. The direct costs incurred by the State in respect of five site clearances completed by the end of 2012 totalled just over €5.4 million. The costs per tonne at the sites where clearance was completed during 2012 were significantly lower than the cost for the sites cleared earlier. This is primarily due to the lower unit rates for waste disposal available under a framework contract established by the NTFSO. The report recommends that the Department consider the potential for procurement initiatives to produce savings for other classes of expenditure under the waste repatriation programme such as the transport of the waste to licensed facilities in Ireland.

The report notes that the Environmental Protection Agency's office of environmental enforcement continues to examine material uncovered at the illegal dump sites in Northern Ireland with a view to identifying offenders and considering the potential for prosecutions. There have been no prosecutions in Ireland to date in the current repatriation exercise.