Oireachtas Joint and Select Committees
Thursday, 26 November 2015
Public Accounts Committee
Business of Committee.
Last week, Mr. Robert Watt, Secretary General of the Department of Public Expenditure and Reform, appeared before the committee. The Chairman raised the issue of the Fennelly commission and words were used to the effect that there should not be a blank cheque involved in that commission of investigation. I raised the issue of the Irish Bank Resolution Corporation, IBRC, and the uncertainty with regard to how long it will take to finalise that commission of investigation, the comments of the High Court judge who is conducting it and the warning he has given that this could be a waste of taxpayers' money. I raised this matter in the Dáil yesterday. If legislation is needed with regard to that commission of investigation, a financial analysis must be conducted and made public before any decision is taken to move on in that regard. There was agreement on the sense in that in the committee last week, given what you and others articulated, especially when the judge in question has effectively put the Government on notice that, in his opinion, it is uncertain at present as to how long this will take and he wonders whether it is a good use of public money and value for money for the taxpayer.
The committee should consider formally asking that before any new commission of investigation, or even an extension of an existing commission of investigation, is decided upon, an analysis would be conducted as to how much it would cost, including the projection over a number of years, and that it would be made public. That is a reasonable request considering that the Mahon, Moriarty and beef tribunals collectively cost the taxpayer approximately €250 million. The point of establishing these commissions of investigation was that they would not be tribunals. They would be shorter and would not amount to a blank cheque for lawyers, frankly, which is what I have seen with some of the tribunals in this country. The point was that there would be a time limit, so it would not be open-ended. The Committee of Public Accounts has a role to play in asking the Government to consider that - at the very least and before it takes any decisions on these commissions of investigation - the length of time involved must be certain and that a spending cap might be necessary.
I support what Deputy Deasy said. When the commission of inquiry legislation was going through the Houses in 2004 and 2005, that was very much the intent behind it. The legislation was seen as creating a viable alternative to the tribunals, which were perceived as being open-ended and costing the taxpayer an arm and a leg. The purpose of the commissions of investigation was to be specific. It was to focus the structure and the operation of the inquiry so it would be done with the maximum result but with minimum cost to the State. The legislation put in place a dual structure in respect of the legal system on the one hand and non-engagement with the legal system on the other hand. That combination of approaches would have to be achieved correctly to ensure that a vast quantity of money was not being spent, particularly by the engagement of major legal teams. This particular case highlights that. With regard to the Fennelly report and the IBRC, it would be worthwhile if we could find a mechanism to review the situation in terms of cost to the taxpayer in the context of the Committee of Public Accounts seeing how we could deal with it here to get some guidance and direction on the expenditure of taxpayers' money.
I agree with the thrust of those comments. Obviously, the cost of any inquiry is a matter of concern and anything that amounts to a blank cheque book for legal firms or lawyers must be avoided. However, it is important that the committee makes it clear that the issues under consideration must be fully investigated because potentially serious questions in respect taxpayers' money arise from the serious matters the judge was asked to investigate. There should not be an impression that issues surrounding potential costs of the commission were being used in any way or for any purpose to block a full and thorough investigation. However, it is a good idea to make inquiries and ensure that legal costs, caps, per diemrates and so forth are in full view and under the surveillance of this committee. It is a fair to ask that. Nevertheless, it is an absolute imperative that each of the deals under consideration, most notably that involving Siteserv, is fully investigated. We should not be, nor should we be perceived to be, throwing up a further road block in achieving a full investigation of those matters.
It must be said that it is most regrettable that the inquiries referendum was voted down. Of course, it was the legal people, through their careful intervention, who largely brought that about. It is worth making that point at this stage.
We had this discussion last week with regard to the Fennelly commission and IBRC. To allay any fears, Deputy McDonald, it has nothing to do with the issue being investigated, getting to the bottom of it and dealing with it in an effective way. However, the history of tribunals and other investigations is that once they are established by the House, they appear to get out the gap and costs are never a question. When that happens, as history has shown, we cannot intervene. We are told that we cannot interfere with the direction of the tribunal. The purpose of the conversation last week, and again today, is that some restraint be put on the costs, legal fees and structure of the proposed investigation or tribunal before it sets off, so that we at least have an idea of the cost implications versus the outcomes we are trying to achieve. We have not learned from the history of this, and there appears to be a reluctance and inability to address it.
Last week, we asked Mr. Watt for the figures in respect of the Fennelly commission and the IBRC. The figures were not available that day but we were told that they could be made available to us immediately.
I understand that we still have not got those figures and that is unhelpful. The committee is right to follow the proposition outlined by Deputy Deasy in the context of protecting the taxpayers' money because it is a more sensible, prudent and constructive approach to the work of any ongoing tribunal or investigation. We should take this issue up next week with the Department of Finance but in the meantime we should write to the Departments concerned about this issue, make our views known and seek a response. Hopefully we will get an input into overseeing or examining the cost of the proposals that are being put before the Oireachtas. Is that agreed? Agreed.
We should ask the Department of Public Expenditure and Reform to structure that and to come back to the committee. In the context of the IBRC case, the High Court judge was effectively telling the Government that this needs to be structured better, with definite timeframes and that it needs to be clear because as of now, it is not. A High Court judge is dealing with this but it could end up being a complete waste of taxpayers' money if it is not structured differently. We are not getting into the substantive issue of whether there should be an investigation. I agree with the Chairman on that point. I am conscious that there may be information that I am not aware of and that when the Government made that decision, it may have had information to which I am not privy. I am not going to second guess that decision but we should ask for that structure to be imparted to this committee, based on what the High Court judge has said.
I entirely agree with that and the points are very well made. However, it is important that we, as a committee, put on the record that a decision has been taken that the matters at hand need to be investigated and that they speak to the issue of taxpayers' money, at least potentially. I am not jumping to conclusions in terms of the possible outcome but it is important that we say that, along with saying that we need to see the structure. Of course, there has to be some sanity in respect of the cost of this to the public purse. The Chairman is absolutely correct in that regard.
Therefore, we will write to the Department of Public Expenditure and Reform and give notice to the Department of Finance, representatives of which are due to appear before us next week that this matter may be raised again. We will ask the Department of Expenditure and Reform to give us the figures we have requested before the end of business today, given that those figures are apparently quite easy to get. Let us have those figures; we were promised them last week.
Yes. We want as much complete information as we can get. That is what we were promised last week but we should have it today. We will send a pigeon across to Mr. Watt's office and see if we can get that information from him.
Perhaps we should speak to the pigeon keeper and ask him to make sure that a robust pigeon is sent out. On the question of sanity raised by Deputy McDonald and the Irish Fiscal Advisory Council, IFAC, it might be no harm if someone was tasked with the job of costing more serious policy matters that will be put before the electorate over the coming months. It would make perfect sense for some State agency or organisation to be put in charge and to outline the costs of the bigger proposals being put forward by every political party and none so that someone has a handle on what people are getting involved in.
There should be some analysis, regardless of politics. Somebody should be charged with providing a broad analysis of particular projects that may be put before the people in the context of a general election. That happens in other jurisdictions. We need at least an indicative guideline on the costs that might be involved and it would be no harm to make that available to every political party and to the Members of these Houses, who want to establish costs in a real way. I am not referring specifically to this Government but to Governments in general when I say that far too often it is only after a general election that costs get counted properly but they should be counted as we go along, in an independent way.
Officials from the Department of Finance will be here next week so we can take it up with them then. The Department plays a small role but I am talking about a bigger role for some agency to take on.
I agree with the Chairman completely. The Department of Finance has point-blank refused to do that. We have tabled various parliamentary questions on it and my party colleague, Deputy Michael McGrath has published legislation which would enable the IFAC to carry out that role. All the Department of Finance is willing to do at the moment is to cost an individual proposal but it will not cost a package of proposals because the proposals in a package can interact with one another. The Department will only cost individual items. The Minister for Finance has refused to allow his Department to cost any package of proposals. That is why the Chairman's suggestion is worthwhile because the public is entitled to know these things before the election.
It might not be the Department of Finance in this case but we can raise it with the officials next week when they are here. I raise this because it is a serious issue, regardless of who is in power. It is also vital to develop the whole concept of public accountability through the Comptroller and Auditor General and this committee. The issue will have to be pursued. The situation will change but the change is not happening quickly enough and is not keeping up with the changing dynamic in the economy and the country. Again, we will raise the matter with the Department of Finance next week.
Under matters arising from the minutes, the National Paediatric Hospital Development Board, NPHDB, submitted information on the development of the hospital on the Mater site. The clerk will prepare a short report on the issues involved which will be circulated next week. Is that agreed? Agreed.
Under correspondence, item 3A is correspondence from the Accounting Officers, while item No. 3A(1) is correspondence dated 20 November 2015 received from Mr. Noel Waters, acting Secretary General of the Department of Justice and Equality regarding clarification of an issue following our meeting of 5 November 2015. This is to be noted and published. We also have correspondence dated 20 November from Mr. Barry Ryan at the Department of the Environment, Community and Local Government regarding NAMA properties refused by local authorities which is also to be noted and published.
On those NAMA properties, the language is somewhat opaque in a reply given to Deputy Broughan. In terms of the explanation given that the properties were unsuitable, there is a suggestion that not only were they unsuitable, but that they were unavailable. We need some further clarification because NAMA told us a number of weeks ago that 6,500 units of accommodation were made available to the 31 local authorities but approximately two thirds of them were rejected by the local authorities. Those properties were made available over a period of time but eventually NAMA had no choice but to put them up for sale to the private sector, where they were snapped up.
They have all been sold except for 300 units. We are in the middle of a housing crisis and it is incredible to think that over 4,000 units of accommodation should not have been suitable for whatever reason, yet the private sector had no problem at all purchasing them for housing purposes. We need further clarification as to why the local authorities did not take them and whether the full information was provided to us by NAMA on the suitability and availability of the properties in question. I ask that we seek further information on those 4,000 plus units.
I am not disputing that. It is a good idea to get as much information on this matter as we can. We should look to the Department to furnish us with that. Of course, sizeable as those figures are, they are a drop in the ocean in respect of the housing crisis.
We will seek clarification, then. No. 3B(1) is correspondence dated 10 November 2015 from Mr. Patrick Coughlan of Mullingar, County Westmeath, re Castlemartyr resort, to be noted and published. We have had previous correspondence from Mr. Coughlan on NAMA actions in Castlemartyr. It now appears that information on local property tax payment by Mr. Coughlan was also available to third parties and to NAMA.
NAMA will not deal with us on individual cases but these issues have been raised directly with the committee by Mr. Coughlan in respect of this particular property. I believe NAMA should respond to us and deal with the issues that have been raised in so far as it can. I see nothing wrong with that. It has been brought to our attention. The various documents down through the last few months have been published, noted and sent on to NAMA. We have not received a detailed response to any of it. There are serious issues raised. We are not lobbying or advocating on behalf of this group or individual. We simply want to know what the position is. I do not see anything wrong with that, given that the former and-or current property owner at Castlemartyr has made his side of the story known to us. If necessary, we can ask NAMA to come before us and explain it. I believe we are entitled to a comprehensive response to the issues raised. I ask that we send the latest round of correspondence to NAMA and ask whether it wants to reply by letter or come before us on a particular day to give the explanations for all the concerns that have been raised here in public session.
I should point out that this is an issue for the Revenue Commissioners as well, so we can write to them. It is the same request: to please give us the information in correspondence or, if they feel more comfortable, to come before the PAC to explain the matter and be questioned on it. We can set that day before Christmas, it is not a problem.
No. 3B(2) is correspondence dated 17 November 2015, received from Mr. Éamonn Casey of Debt and Development Coalition Ireland. It has made recommendations for the PAC based on a report by the coalition. I do not know what coalition that is.
I agree with Deputy Costello. The issue is something we should not duck. They are not asking for a full meeting but rather to meet with just a couple of us initially to make a case. They are talking about something which is delicate but which concerns billions being lost to the Exchequer, which is a very big issue.
One word of caution here. It is something the Minister for Finance intimated yesterday with regard to what is coming from Europe, specifically as it pertains to Apple. It was not just an intimation; he was effectively saying that a lot of the criticisms of Ireland's corporate tax structure and the Apple issue were politically motivated. We should be careful with regard to this group. We should find out its make-up before we bring its members into the public accounts committee. I tend to agree with the Minister for Finance. There are a lot of countries within the European bloc that have for a long time been critical of our tax and corporate tax structures. They are competing with us. I just think we should be careful with regard to this particular group.
It is an NGO. The documentation states that the production of the policy document was undertaken with the assistance of the European Union. One presumes this group has been around for quite some time and has access to funding through one of the funding streams. I agree that we should meet and see where an investigation, examination or discussion might go. I do not think there is a question mark around the bona fides of the group itself. As Deputy Ross said, the issues are very substantive and serious in respect of the Exchequer and the taxation regime. There should certainly be a meeting with a view to a session here if that is what we decide.
An EU review is being undertaken, I understand, which is to report in January. Arising from this correspondence, the clerk and I and Deputy Ross, if he wants to come, could meet the group and see what it is about. We could then report back to the meeting.
No. 3B(3) is correspondence dated 17 November 2015 from Mr. Joseph Haire re the interchangeability of brand medicines. We could note and publish this and forward it to the HSE for further response to questions that Mr. Haire has asked. There is a significant amount of money involved. The Comptroller and Auditor General may also want to examine the costs arising from the interchangeability of medicines. We will acknowledge this to Mr. Haire and pursue the matter as outlined.
Correspondence dated 18 November 2015 was received from Ms Julie Gibbons re payment of water rates. This is to be noted and published and sent to the Department for comment. Maybe the local government audit service should examine the matter. We will ask for its response.
Correspondence was received from Deputy Mary Lou McDonald re funding to the children and youth working group in Stoneybatter. This is to be noted and published and forwarded to the Department of Children and Youth Affairs for a breakdown of the financial provision allocated to this group.
Certainly that response would be welcome. This has been an ongoing issue for youth workers and providers in the Stoneybatter area. The nub of it is that there is an anomaly of about €76,000, conservatively, in respect of the spend.
The City of Dublin Youth Service Board, CDYSB, has given one figure and the Department has given another. Similar services across the State are under considerable pressure, therefore, these people want clarification and a final figure on what is being spent. Their worry is that the Department is issuing figures that inflate the spend in the Stoneybatter area and they are concerned that this be clarified, or if it is the case that money ought to be going into the Stoneybatter area but, by dint by some of some administrative error, is going elsewhere, they want that clarified also.
No. 3C covers documents relating to today's meeting. Nos. 3C.1 to 3C.3 are briefing documents, all of which are to be noted and published.
No. 4 relates to a report and statements. There is only one from Pobal for 2014, in respect of which there is a clear audit, and this account is to be noted.
Our work programme can be seen on screen. Next week we will deal with the Office of the Minister for Finance at which time we can raise the issues we spoke about earlier. The following week we will deal with WIT and CIT.
In regard to previous correspondence, we received a letter on 14 May from the Department and it refers to anonymous correspondence relating to Tralee IT. Can we ask the Department for a copy of that?
There are other outstanding items of information relating to CIT which relate to the costings of its recent report. One report states the costings are €100,000 and another one states they are €65,000. We should get the internal costs of this report and the breakdown of those, and who managed and produced the report. Also, there is mention of the due diligence report that was prepared by Deloitte and O'Flynn Exhams. We should get a breakdown of the costs of that. Is it possible to get a copy of the minutes of the audit committees of these, or is that a request too far? I am thinking, for example, of the audit committee of CIT. We are going to examine it in regard to its audit. Perhaps the minutes of the audit committee meetings might be of help to members. With respect to the other document, we need to establish the costs of it. How do they reach a point within the college where they produce the document for €65,000 or €100,000 and then somebody decides to redact it? What is that process? Can we ask for clarification on that? Who decides to redact and who decides what to redact?
Another issue was raised in correspondence about the cleaning staff in CIT. It came in by way of anonymous correspondence. We should forward that for clarification in regard to their contracts and employment; the issue of sick pay and so on was raised. Let us have the clarification before the meeting rather than ask for this again at the meeting and not getting full clarification then.
Is there any other issue in regard to the work programme? The work programme is agreed. There is no other business. We have agreed our agenda for next week, which is Vote 7: Office of the Minister for Finance, Chapter 1: Exchequer Financial Outturn, Chapter 2: Government Debt, Chapter 3: Cost of Bank Stabilisation, and the Finance Accounts for 2014.