Oireachtas Joint and Select Committees
Wednesday, 29 June 2016
Select Committee on Communications, Climate Change and Natural Resources
Estimates for Public Services 2016
Vote 29 - Communications, Climate Change and Natural Resources (Revised)
I remind members and witnesses to turn off their mobile phones or switch them to flight mode. Mobile phones interfere with the sound system and make it difficult for parliamentary reporters to report the meeting. Television coverage and web streaming can also be adversely affected. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
I welcome all members and witnesses, especially any newly elected members, to the first public meeting of this select committee in the Thirty-second Dáil. It is a great honour for me to chair this Oireachtas committee and I look forward to working with all members in a positive and constructive manner.
I welcome the Minister for Communications, Energy and Natural Resources, Deputy Denis Naughten, and the Minister of State with responsibility for Gaeltacht affairs and natural resources, Deputy Seán Kyne. On behalf of the committee, I congratulate both on their appointments, and we look forward to working with them.
I also welcome the officials from the Department of Communications, Energy and Natural Resources in attendance today: Mr. Mark Griffin, Secretary General; Mr. Martin Finucane, principal officer; Ms Finola Rossi, principal officer; Mr. Denis Maher, principal officer; Mr. Kenneth Cleary, assistant principal; and Mr. Jim Whelan, assistant principal. I thank the officials for providing the briefing material for the committee today.
As members are aware, we are meeting this morning to consider the 2016 Revised Estimate for Public Services for the year ending 31 December 2016, Vote 29 - Communications, Energy and Natural Resources, referred by Dáil Éireann to the committee on 26 June 2016.
The OECD report Review of Budget Oversight by Parliament: Ireland sets out a roadmap for enhanced parliamentary scrutiny of spending by Departments throughout the budget cycle, which will have the following elements: ex-ante, budget year and ex-post. It is essential that the Department supply high-quality information in a timely manner to the committee. The committee intends to engage further with the Minister in September 2016, with a focus on impacts on expenditure in 2017.
As agreed in private session yesterday, the meeting will adopt the following structure. A fixed time will be allocated to each programme, A to E, with the option of returning to particular programmes after each has been gone through if issues remain outstanding. A timetable for the meeting has been circulated as agreed. At the outset of the consideration of each programme, I will ask the Minister to give a brief overview of the programme, including pressures that are likely to have an impact on the Department's performance or expenditure on the programme in 2016. This will be followed by a question and answer session for members.
When programmes A, B, C, D and E have been considered, the committee may consider the appropriations-in-aid information presented and programme F, administrative expenditure generally, with subheads A1 and A2 of each programme taken together. The committee also agreed that we should consider all the budget allocations across the programme subheadings together. This will allow members who have an interest in a particular programme to schedule their time and ensure the committee gives consideration to all programmes. The emphasis of questions should be on how effectively financial resources are being managed and the performance achieved relevant to that programme. I ask members putting questions or raising issues to indicate the subhead to which the question relates and the page number in the Department's briefing to which they are referring.
I wish to ask the Minister a question about the title of his Department. The existing Department is the Department of Communications, Energy and Natural Resources and it will be renamed the Department of Communications, Climate Change and Natural Resources, though the Minister told the Dáil it would be renamed the Department of Communications, Climate Action and Environment. Can he elaborate on the transfer of functions from the old Department of the Environment, Community and Local Government and when the transfer of functions will take place? When will the name of the Department and the title of the Minister be changed and how will that affect the 2016 Estimates?
I thank the Chairman and congratulate her on her selection as Chair of this committee. I congratulate and welcome each of the members of the committee. This is the first committee of this Dáil and some members are old hands, such as Deputies Eamon Ryan and Timmy Dooley, but I particularly welcome Deputy Bríd Smith on her first time in a select committee. I look forward to working with all the members. As I said to my officials shortly after my appointment, I would like this Department to be a facilitating Department, facilitating change that is necessary across society and Government. Key to that is the national broadband plan which will bring about radical change the likes of which we have not seen since rural electrification. Climate action will also drive change across society and in every community across this country, particularly in the public sector, at least in the short term.
At the moment the Department is officially the Department of Communications, Energy and Natural Resources and we will retain all those functions except for responsibility for the delivery of the Kerr report on the post offices and the renewal of our post office network. The Minister for Arts, Heritage and the Gaeltacht, Deputy Heather Humphreys, will take over responsibility for the roll-out of the national broadband plan subsequent to the signing of the contract in the middle of next year. We have already transferred officials from the Department on secondment to the Department of Arts, Heritage and the Gaeltacht to assist with the project. The Minister's role in broadband is to ensure that once the contracts are signed, the contractors will not have any impediments in physically rolling out the infrastructure. She will remove bottlenecks and deal with access to wayleaves, as well as ducting, permissions and authorisations. She will see to it that an individual is responsible in each of the local authorities and will also determine what communities should be given priority in the roll-out of the plan. She will look at whether 1,500 primary schools should get priority or whether community centres or businesses should get it, all the time ensuring this does not inhibit the speedy roll-out of broadband. She will engage with local authorities and with communities through the Leader programmes.
The new title of the Department will be the Department of Communications, Climate Action and Environment. The climate action section will incorporate the existing functions of the energy division within my Department and the environment functions within the Department of Environment, Community and Local Government will transfer to my Department.
Some 55 staff will transfer and I understand a memo has been approved by the Attorney General. This memo is 15 or 16 pages long and deals with the responsibilities travelling over including waste, air quality, climate action and radiological protection. We will also have overall responsibility for the Environmental Protection Agency. A budget of some €44 million will transfer. The intention is that the new Estimate, with which we will deal later this year, will deal with all aspects of the new Department. At the moment we are discussing the Estimate that was approved during the budget process of last year, at which stage it was under the Department of Communications, Energy and Natural Resources.
I believe the Chairman, committee members, my staff and I can all work in a very co-operative manner. I want my Department to be a facilitating Department but I also want to be a facilitating Minister. I have spent 19 years on the Opposition benches in Dáil Éireann and I know what it is like and how frustrating it can be. If someone is prepared to come up with a constructive idea or suggestion, I will try to facilitate it as far as I can, no matter who it comes from or what side of the House they are on. I am prepared to work with anyone and everyone with that objective. I am accompanied by my Secretary General, Mark Griffin, principal officers Martin Finucane, Finola Rossi and Denis Maher, and assistant principals Kenneth Cleary and Jim Whelan.
In 2015, the Department had a capital budget of some €93.6 million of which some €84.5 million, approximately 90%, was spent on the programmes and €5.2 million was carried over to the 2016 account. In 2015, the Department had a current budget of €329.5 million, of which €315.4 million, some 96%, was spent. The Department undertook a technical Supplementary Estimate in 2015 which reallocated approximately €2.5 million which was already within the Vote to the Sustainable Energy Authority of Ireland and a once-off amount of €4 million arising from additional offshore data sales from the petroleum affairs division. To the end of May 2016, the Department had spent €128 million on the current side, some 95% of the profile to the end of May, and €24 million, some 79%, on the capital side.
The Department cannot undertake a Supplementary Estimate in 2016. I am happy to go through the various programmes and answer questions from members.
As he goes through the programmes, can the Minister say how each will be affected by the Brexit result? I ask the Minister to make his opening comments on the first programme, which is programme A on communications.
The focus of programme A is to support economic growth, jobs, competitiveness and social inclusion through a range of policies and regulations designed to facilitate a more digitally connected society. This includes promoting timely investment in next generation broadband networks, the use of digital technologies by citizens and businesses and support for digital entrepreneurship. The Estimates for programme A include an initial funding of €10 million for the national broadband plan to bring high-speed broadband connectivity to all parts of Ireland through a combination of commercial investment and State intervention. In this regard, approximately €2 billion has been spent by commercial operators over the past four years. The programme also includes the State-owned metropolitan area networks, which play an important role in driving competition in the regions and facilitating telecommunications operators, large and small, in providing high-speed broadband services without having to build out their own networks.
Programme A supports Ireland's national digital strategy, which aims to realise the full benefit of a digitally enabled society through measures such as the trading online voucher scheme, the school digital champion programme and the BenefIT 4 programme, which are all aimed at encouraging citizens, businesses and communities to engage with the Internet. I would like the assistance of members of the committee in their constituencies to promote the value of the trading online voucher scheme. We have analysed the 2,000 vouchers that have been issued to date. About 800 businesses were surveyed. Those businesses have increased sales by one fifth and employment by a third. Two thirds of them are now trading internationally. I actively encourage businesses with fewer than ten employees to contact their local enterprise office to avail themselves of support. There is a 50:50 grant of up to €2,500 available per business to allow them to start trading online. Interestingly, about 50% of those who apply for it do not draw down the grant because a training programme is tied in to it. A lot of businesses have found the training programme extremely useful in maximising their existing online presence. I encourage any business that is not trading online at the moment to do so, because there is potential to maintain existing employment, increase sales and potentially grow market share.
Programme A also promotes digital entrepreneurship in Ireland through the National Digital Research Centre and the Digital Hub Development Agency. The 2016 Estimates include €750,000 operational funding for the National Cyber Security Centre for the protection of critical infrastructure and Government networks. Finally, on the communications Vote, I ask the committee if it could at the first available opportunity facilitate a presentation from the chairman designate of An Post, Dermot Divilly. I know he is anxious to come before the committee. It was scheduled to take place last February under the chairmanship of the previous committee. I would appreciate if that could be facilitated as soon as possible.
On the telecommunications impact of Brexit, the real issue is roaming. However, roaming charges in the EU and the EEA are to be abolished by 2017. We do not see any difficulty from a roaming perspective unless the existing directives are specifically replaced. I do not see the benefit in replacing those directives from either our or a European Union perspective. We do not foresee any issues arising on communications at present. The cyber security NIS directive is a work in progress. It is timetabled for transposition in 2018. We expect discussions will continue on that with member states, including the UK. From that perspective we do not see an issue. The more detailed issues will come up in some of the other aspects of the Vote that we will deal with later.
First, Chairman, I wish you the very best of luck in your role. I look forward to working with you. I apologise for not being able to make the meeting yesterday afternoon. The Select Committee on Arrangements for Budgetary Scrutiny was meeting at the same time. There is also a meeting later this morning, so apologies if I have to head to that. It is looking at a similar Estimates process, so I feel on this occasion I have to attend it.
I also wish the Minister the very best of luck. His is a hugely important Department, dealing with critical economic and social development issues of our time. Even though the budget allocation is very small relative to other Departments, the policy implications are huge. At the end of the Minister's five years in office we should be looking at tripling or quintupling the budget because the climate change challenge we face requires that sort of ambition. That is what we should be thinking of.
We should be thinking big and ambitiously. Similarly, in regard to digital communications I look forward to hearing details on An Post and other programmes.
In regard to Brexit, I agree with the Minister and I do not think roaming will present difficulties. I imagine there will be arrangements where companies such as Vodafone and Telefonica will apply the same rules. The more major issue - let me flag it - is trade and services. The United Kingdom is very capable and efficient at trading on the Internet. It is probably one of the best trading countries on the Internet. Could Britain be disadvantaged by Brexit as they are no longer in the Single Market? Will leaving the European Union free Great Britain up to apply other rules? The Minister mentioned the small companies that are and should be trading online. Are there consequences? This is not an issue to be decided on now. It is not in the Estimate. I imagine we will have to look at this issue in real detail because it is complex. Nobody knows what will happen in regard to traded services. There are international as well as EU rules around Internet governance. I image we would have to concentrate on them.
A difficultly in that regard is that the Data Protection Commissioner is under the Department of Justice and Equality, whereas the Department of Public Expenditure and Reform looks after Government information technology. The Department of Jobs, Enterprise and Innovation also has an interest in it. The Department of Communications, Energy and Natural Resources has responsibility for cyber security, which is the correct place to have it. How will the co-ordination take place, in particular with the Data Protection Commissioner and the Cyber Security Office that will be set up? I would be interested to know how it works on cross party basis.
In response to Deputy Ryan's suggestion on tripling the budget, naturally enough I would love to see that happen. At European level in relation to the financial constraints that we are under, even if we have money to try to invest it in capital projects, there are limiting conditions in regard to the financial structures. I know that Commissioner Cañete and some of the other Commissioners are pushing this agenda quite strongly. I have spoken to Commissioner Cañete on three or four occasions in this regard. We have very demanding targets to reach and even if we have the resources available to us, we are trying to fight this challenge with one hand tied behind our back. I hope that if we can make progress on that aspect, it will allow the Government far more flexibility in putting the investment that is required for getting to a decarbonised society by 2050 and being a long way along that road by 2030.
In respect of the impact of Brexit on trade and services, we have a major challenge to try to ensure that we can capture the digital market here in Ireland. Every minute, Irish consumers are spending about €14,000 online but only about €4,000 a minute is used to purchase products and services in this country. There is a great opportunity to develop our own sector to meet our market needs. Second, many of the issues the Deputy raised will come in under the digital single market negotiations. He is quite correct that issues arising from Brexit and the UK will have to form part of those discussions. It will be a challenge not just for us, but for many other member states to deal with it. We have started the process. A number of Departments are involved and that is why the Minister of State, Deputy Dara Murphy, has a co-ordinating role between the various Departments.
The Cabinet sub-comittees may have a co-ordinating role. As I said at the outset my Department will be a facilitating Department. I think we can help to drive some of the change that is required in some of the other Departments. We are quite willing to work with the Minister of State, Deputy Dara Murphy and other Ministers not just on the Cabinet sub-committees but on a one to one basis to drive the type of change and openness that is needed to make a real difference.
I have a number of questions on subhead 3, the profile of expenditure at the end of May indicated that he had expected to spend about €4.3 billion, however the actual expenditure at the end of May was just about €1.5 or €1.6 billion. Was there any particular reason for that?
There were questions in the Chamber on the postcode. A former journalist in this House is now An Coimisinéir Teanga. He had a number of comments about the level of correspondence he has had from various different people about Eircode and the complaints he has received on the use of the Irish Language in that regard. It is just another indicator of the problems associated with Eircode. In terms of looking at value for money in the long term use of Eircode, does he have plans or proposals to review Eircode as a suitable system? Has the Minister proposals for changing the nature of the Eircode to create a hierarchical structure?
First, there are ongoing discussions with An Coimisinéir Teanga in respect of the issues he has raised and we are hoping to progress them. In regard to Eircode, we have no plans whatsoever to change it, in fact I was one of the earliest people to take up Eircode. As I said in the Dáil, I have had the same reservations on Eircode, in particular the annexation of large parts of my own county, something I am not one bit happy about. I think those in counties that have large conurbations close to them have that issue. Eircode has the potential to save lives. I sent out 53,000 pieces of literature encouraging people to record their Eircode so that they could pass it on to the ambulance service if they so required. This was because of particular problems I have had in my constituency with ambulance delays, a problem experienced right across rural Ireland. I think there would always be a long lead-in time in respect of Eircode and it will take a number of years for people to know their Eircode and to use it openly but even within the next 12 to 18 months, I think there will be a far greater uptake .
It is roughly 12 months since it was launched. I think it is a very positive development that the ambulance service has taken it up. I think other emergency services will take it up and members will see other providers roll out the use of it in the next period of time.
If it was just about the guidance to a location, we could have dealt with that through getting an education system in place that would encourage people to record their co-ordinates. There is already a grid system in place that identifies one's co-ordinates, which is guided through the GPS system.
Throughout the world, the real purpose of a postcode - we call it an Eircode postcode - is to facilitate, in the first instance, the distribution of post and now, more particularly, packages. People knew and understood the old system of the posting and arrival of a letter; the postman knew his way around. The marketplace has changed very significantly, which is good. It is good competition and business for An Post. Other providers seek, however, to use a clustering methodology for efficient distribution. We talk about online trading, online vouchers and encouraging more people to get into the business of trading online. While online trading is carried out in an electronic environment, the flip side of it is a physical edifice which requires somebody to take the package and deliver it to the door. If one deals with and talks to logistics companies, they must have a method of aggregating packages to locations and then breaking them down further in order that their transportation is used efficiently. The Minister will be aware from our renewables targets of a necessity to reduce transport emissions. This requires good IT systems but, unfortunately, Eircode's IT system does not provide that level of usability. I encourage Deputy Naughten, as Minister, to reconsider what Eircode needs to do, what its full purpose is and whether it is fit for that purpose. There is a need for a hierarchical dimension to it.
I understand the notion of fill-in addresses and houses built along the way but when Deputy Ryan was Minister, his expert group recommended a hierarchical dimension to the Eircode postcode. This was dropped along the way for whatever reason, and we all have our own views as to why that might have happened, but I think it has contributed to the lack of take-up. I understand that not everybody will know their Eircode postcode by heart but, over time, when the demand increases, when people start looking for it and when one purchases something online, if it is a requirement to enter one's Eircode, if it is being used by the ultimate distributor, then there will be greater uptake of it. This will have a knock-on effect of people memorising it more and it being more beneficial in the event of an emergency. This is just a request to the Minister. I do not expect him to have the solution at once.
Eircode had particular challenges to deal with in Ireland, compared to anywhere else in Europe. We have 35% non-unique addresses in Ireland. The country nearest to us in this regard is Portugal, with 2%, so we had a very difficult problem. In the Dáil, I used the example of Milltown. There are probably about 30 Milltowns in my constituency. I think pretty much every other rural constituency would have the same number, which causes problems. First, the same names and similar addresses in rural areas needed to be overcome and, second, locations had multiple forms of address, which needed to be addressed. These were the basic problems for Eircode. Using geo-co-ordinates does not deal with the issue of multi-unit developments, so the Eircode postcode provides a specific code for a specific premises. I have heard the argument about the hierarchical use of Eircode postcodes but what is to be done in the case of a one-off house in a rural area? I know Deputy Ryan may not be as sympathetic as some of us to these issues but they must be dealt with.
More important, from Deputy Ryan's point of view, is that we need to develop a significant number of brownfield sites in Dublin. How many Eircodes does one allocate to an existing vacant brownfield site? Does that allocation then restrict the number of units one develops on that site? If one develops additional units on that site, because of changes in designation or whatever the case may be, how would one decide on the Eircode numbers? That then adds another level of confusion. I have seen housing developments, particularly in the Chairman's constituency, where the site has had phased development. The first phase of the development is numbers one to five, the second phase of the development, which was to be the third phase, is numbers 15 to 20, and the next phase is numbers five to ten. Trying to find the next house number in some housing estates can be very confusing. Therefore, when we cannot get that right, how will a hierarchical system work?
I think the model that has been used for Eircode is a good model. I think it needs to be given the opportunity to prove itself but I think it will prove itself. Anywhere in the world where postcodes have been introduced, it takes a period of time for people to become accustomed to them and to adopt them. We spent a significant amount of money on rolling out the Eircode. If it dealt solely with ensuring that ambulances got to the scene of an incident quicker, it would prove its worth. I think it will prove itself in the medium term. It is not going to happen overnight.
Deputy Dooley asked me about the underspend in the subhead. The underspend is in respect of the national broadband plan. We have allocated €10 million for that. As members know, it is a very complex contract. It may be the case that we will not spend the full €10 million. We only bring in outside expertise as and when we require it. It is my intention, if funding is available, to invest in energy efficiency later on in the year. The SEAI better energy communities scheme has been over-subscribed. The SEAI announced funding in respect of it last week. I would like to drive more investment into the area of energy efficiency and insulation. That is my intention, if funding is available.
At the outset, I wish Deputy Naughton well in her role as Chairman. I look forward to working on this committee. I welcome the Minister and acknowledge his remarks on working with all groups and parties in the House. That has been my experience of the Minister to date.
I have a specific question on subhead A3, the roll out of the national broadband. The total for subhead A3 is €16.2 million and the single largest line item of expenditure is the €10 million allocation for the national broadband plan. A sum of €10 million is a nice round figure but I wonder how it will be spent. In earlier remarks, the Minister alluded to the fact that some of it will be spent on consultancy and external expertise. Given the highly technical nature of the roll-out plan, external expertise in engineering, technology and IT will be required. The nature of consultancy projects are intangible. It can be hard to quantify the deliverables and outputs. My query relates to the tracking to be put in place on the engagement with external consultants and the kind of reporting structure that will be in place. There is a project management adage - an IT project that NASA was running was one year overdue. One of the programme managers asked how a project could be delivered one year late, the answer was one day at a time.
It is very apt. It is a reminder to all of us involved in governance and oversight to ensure at the outset before the expenditure is approved that the checks and balances are in place. It is in a consultant's interest to perpetuate the job and it is in the client's interest to achieve the deliverable in the shortest timeframe. My question for the Minister and his officials is what kind of checks and balances are in place around the consultancy spend to ensure that the State is getting value for money and that the deliverables are produced and delivered in a timely fashion. The briefing note refers to the intention to award the contract in 2017. This is welcome but we need to ensure we are on track.
Since my appointment I have been speaking frequently, almost every second day, with some of the senior officials dealing with the national broadband plan. I am on top of the project. We have an external procurement evaluation committee of outside expertise that has an overall supervisory role in respect of the overall project and in respect of the requests for any contracts. All contracts go through the current public procurement process and would be audited by the Comptroller and Auditor General. The Secretary General of my Department is accountable to the Committee of Public Accounts in respect of the plan.
Let me explain what is involved. Technical expertise is required on technical issues and economic modelling. One of the consultant reports is on my desk and I am going through it with a finetooth comb. Members will be hearing more about that in the next few weeks. This expertise is a resource not just on the technical side, but helps me to make some of the decisions I must make on this project.
All the consultancy contracts are being awarded after going through the public procurement process. The information in online. There is a very stringent assessment done of what is required and there are specific terms and conditions in respect of what we require. We would not have this expertise in the technical area or in the economic modelling across the public sector. We have seconded staff from other Departments and agencies with expertise in this area. Some of the key staff on this project are not direct employees of the Department but have been seconded from other Departments and agencies to assist us with this project.
The purpose of programme B is to promote a vibrant broadcasting sector by ensuring high quality output by the State broadcasting companies and promoting a strong high quality private broadcasting sector. Public service broadcasters such as RTE and TG4 are funded through a mix of commercial revenues obtained largely from advertising, Exchequer grant payments and licence fee revenues. Broadcasting licence fee receipts are estimated to be €222 million in 2016. The broadcasting programme provides €185 million in television licence fee receipts to RTE to enable it to meet its statutory obligations as the national public service broadcaster. In addition, the programme provides €9.4 million in television licence fee receipts and €25.4 million in grant payments to TG4 to produce a comprehensive range of programming in the Irish language. Programme B also funds new Irish television and radio programmes through the broadcasting fund operated by the Broadcasting Authority of Ireland. The fund receives 7% of net television licence fee receipts, which amounts to €14.7 million in 2016.
There is a vacancy on the board of RTE. I can make that appointment following a nomination by the committee.
I ask the committee to deal with that when it has the opportunity because we would like to have the full board in place, particularly with Dee Forbes coming in as the new director general. It would be of assistance to her if we had a full board in place.
I thank the Minister. To come back to his earlier point on engagement with the chairman designate of An Post, we had a discussion with members yesterday. We feel it would be better to wait until the joint Oireachtas committee is in place. We are waiting on four senators to be appointed. At that point, we will be able to progress.
On programme B and the board appointment, from recollection, having been involved in that process before, it requires the Minister to formally write to the committee. However, he might check the statute on that. Certainly, some minor administrative issues in the past arose in the past.
On broadcasting generally, in recent years we have met representatives from the independent and public broadcasting sectors. We have heard different views on funding models. There was a proposal on the initiation of a broadcasting charge, which has been in gestation for some time. Very early in his tenure, the Minister made a couple of profound statements, for want of a better word, where he ruled out the introduction of any broadcasting charge. Obviously, that is a policy decision he has taken but it does not get away from the fact that both the commercial and public sectors have funding issues. When the independent broadcasters come before us, they talk about the public service dimension to their work: the provision of local and regional news, and of information on sporting events. By its nature, that is expensive to provide and is not covered by the commercial support they receive from advertising. That is for the smaller independent entities. In the event of a broadcasting charge and the additional revenues that would flow from it if there was full collection, they hoped that there would have been the potential for them to gain support from it. I would have been a strong supporter of that. Likewise, I have read reports from the BAI, representatives of which came before us in the past and clearly made the point that RTE would need additional funding to meet its obligations. We have had arguments here in the past that I thought were superfluous about thinking we could resolve that issue by paying less to certain stars. I have always tried to avoid that kind of debate but it often gets popular vent in other media outlets. The fact is there are funding shortfalls in both the public and private sides that need to be addressed. There is an inability to collect some €30 million from the licence fee. There seems to be even a reduction in that because of people moving away from using televisions, as opposed to those who have televisions but are not paying the fee, with the advent of just-in-time delivery of the TV that you want. We are all using iPads now in addition to televisions. How does one square the circle to ensure the sector is adequately funded?
First, to deal with the public service broadcasting charge, the previous Government committed to examining the role and collection of the TV licence fee in the light of the existing and projected convergence of technologies, as Deputy Dooley mentioned. This proposed public service broadcasting charge was designed to secure a more stable funding stream for broadcasting.
The Department completed a value for money assessment and engaged in public consultation. It received about 385 submissions in late 2013 with a view to assessing the scope of a new scheme. It needs to be remembered that my predecessor, Alex White, indicated in April of last year that it would not be introduced during the term of that Government. When I was appointed Minister, the position was that the previous Minister had placed the broadcasting charge in limbo. We could continue to tinker about, use it as an excuse to do nothing or try to drive it through a legislative process which has limited Government time as a result of the new structures. There are other legislative priorities in the Department. I had to weigh up how I would achieve the best outcome. The Energy Bill had a high priority in the previous Dáil but on foot of the vote last Thursday, it is even more important. There are also other issues. I could have said we would continue to deal with the broadcasting charge and would work on it for the next 18 months when, in reality, it will not see the light of day in the short term. I think the Deputy is correct. We have to acknowledge that technology is changing. I am not saying the broadcasting charge should be shelved completely but there are opportunities in the short term to bring in additional income into the sector. There is large scale evasion with many people not paying their television licence fee. I do not think anywhere in Europe has similar levels of evasion. It is three times higher than the level in the United Kingdom and in Germany. It is estimated that the loss could be up to €40 million per annum. There are other anomalies within the system that limit the collection of the licence fee. I think we can make far more practical progress in increasing real income by focusing on that in the short term.
Has the Minister given any consideration to involving the Revenue Commissioners in that process? I refer to the success of the non-principal private residence tax. I am sure the Minister's constituency office deals with the backlog as I do when people get to a point where they need to sell a property. The revenues are still ahead of projected profile even at this stage. Is there a role for the Revenue Commissioners here?
There may well be and I am open to suggestions in that regard. As Deputy Ryan knows, the solution to every problem is another Bill rather than using the existing structures far more efficiently to deliver. Deputy Ryan was at the national economic discussion on Monday at which the Minister for Public Expenditure and Reform made the point that it is not just about spending new moneys but it is about whether we are spending our existing moneys wisely. Can we spend moneys in a better and more efficient way? There is a structure for collecting money which I do not believe is being delivered in as an efficient a manner as it could be in respect of revenues coming in. There are many aspects to that. Deputy Dooley's suggestion in regard to Revenue may very well be something at which we could look. The number of people who claim they do not have a television is rising rapidly. I honestly do not believe this is the reality. There are a number of avenues are open to us in the short term and I believe it is more fruitful to take an avenue that will bring real cash into the broadcasting sector.
The Deputy raised the issue of public service broadcasting. I met the independent broadcasters and addressed their annual conference earlier this month. I met RTE's representatives. There has been a benefit from the synergies between RTE and the independent broadcasters.
The radio app has been a phenomenal success. We can build on relationships like that. I do not think the objectives of RTE are as divergent from the objectives of the independent broadcasters as people would like to think. I think they are willing to work together and I am willing to assist them in that process.
The Secretary General from the Department of Public Expenditure and Reform asked how we could get greater productivity. The difficulty for the Minister is that the broadcasting fund is half the allocation. There is not much other stuff to cut.
Is the €185,724,000 the final outcome for 2015? If the Minister believes there is an additional €40 million to be collected in licence fees, what approach would he take to try to get it? For example he could consider taking the collection of fees from An Post, as Deputy Dooley seems to be suggesting a role for the Revenue Commissioners or some other collection mechanism. I am sure that would raise issues for An Post. If the Minister does not get the legislative time to introduce an alternative broadcasting charge, what is the process by which he would look to get extra revenue?
No. The total proceeds in 2014 was €213.2 million and the total proceeds in 2015 was €213.9 million, a difference of an extra €700,000. In 2015, the total income from licence sales was €1,018,444 and in 2014 it was €1,018,370, a marginal difference. That was the reason for the marginal difference in the proceeds.
In respect of the comments I made on the national economic dialogue, I inadvertently referred to the comments as those of the Secretary General, Robert Watt, instead of attributing them to the Minister for Public Expenditure and Reform, Deputy Donohoe as it was he who pointed out that we need to look at how we are spending the money rather than cutting left, right and centre. It is important that we look at how we are spending the money and ensure we are spending it in the best way possible rather than always looking for new money, which I will be looking for. I believe there is merit in that.
In regard to the collection of the television licence fee, one could look at changing from An Post, but that is not what I am looking at currently. I had a meeting with An Post last week. I expressed my concern about the level of evasion. I know that An Post is coming forward with an initiative in the next couple of months. I want to see progress on this in the short term. In tandem with that, we are looking at the existing database. We have had independent consultants look at the existing database in the context of the local property tax register, the electricity meter register and to look at other ways of identifying people who may be evading the television licence fee.
There are also issues relating to content charges being explored, so it is not just about the television licence. There are other avenues for us to pursue in that regard.
The Chairman asked me earlier about Brexit. There is potential to develop the film industry in this country on foot of Brexit. Conditions are being put down at Commission level on the percentage of content that must be generated within the European Union for the likes of Netflix and so forth. We will be the only English-speaking country left in the European Union and there may be potential for growth in that regard. There are opportunities for us, particularly in the broadcasting area. There are implications that may benefit revenue streams for broadcasters as well, and we are actively looking at such issues now.
I am not sure about the Irish film channel and I will have to come back to the Chairman about that. Irish TV has looked to broadcast on Saorview and we gave authorisation within the last month to Oireachtas TV to broadcast on Saorview. It is now doing so. I am sure they are admiring my highlights this morning. We have approved Irish TV for broadcast but there are some technical issues and documentation that must be clarified. We hope to have that live on Saorview in the next few months. We will facilitate that as quickly as possible. I will revert to the committee on the specific questions.
I have a brief supplementary question. The Minister for Public Expenditure and Reform, Deputy Donohoe, spoke about ensuring productivity in what we are doing. Will the Minister share with members of the committee the latest analysis from RTE's review of its operations? Is there a departmental review or could we see RTE's own review of its efficiency and productivity?
A number of reviews have taken place and some elements, as the Deputy understands, are commercially sensitive. I will ask my officials to look into what has been done. There has been a NewERA efficiency review and the key findings were that RTE had demonstrated efficiency and now produces more at less cost than it did in 2003. In comparison with European peers, RTE experienced the largest decline in revenues between 2008 and 2012 and reduced its operating costs by more. RTE is in a constrained financial position and its ability to undertake any meaningful capital expenditure in the future will be challenging. The suggestions made by NewERA included the identification and assessment of potential cost savings via the reduction or elimination of some services and a review of services that are currently or could be provided by the market. That review is taking place. It was also suggested there should be a robust analysis of options regarding the use, in part or whole, of the site in Donnybrook, and that analysis has been completed. I expect a memo on that quite soon. It was suggested there should be additional public funding for the consideration of in-house production and independent commissioning through a review of the possible introduction of an approach based on the window of creative competition used by the BBC.
Deputy Lawless asked about outside consultants and the great benefit of NewERA is that it has gone to many semi-State bodies under my control and had the ability to do an "in-house" assessment, so to speak, within Government. It is separate from my Department but it can do an independent evaluation. This is more open and transparent but we are still talking about Government doing the assessment.
We found NewERA extremely useful not just in carrying out reviews like that done in RTE, but across the board. It is involved with a review currently in An Post. There are projects coming before me for authorisation of investment, in this country or elsewhere, and NewERA can do an independent evaluation and give its views to me on them, which is very beneficial to me in making a final decision on whether to approve an investment by some of the semi-State bodies.
I have a question on subhead B5, which relates to funding for TG4. There is an increase of just under 1%, going from €33.16 million to €33.46 million. My understanding is there is a plan to increase the number of hours, or minutes at least, of Irish language programming. As the Minister mentioned, we will potentially be the only English-speaking country in the European Union but we are also the only Irish-speaking country in the Union, although we may have some Celtic neighbours. The Irish language is going through somewhat of a revival, and in the last election campaign in my constituency, Gaelscoileanna and bunscoileanna were, and continue to be, major issues. There are business interests like Cill Dara le Gaeilge and other groups that have embraced the language locally. I notice within the EU, 180 jobs are to be created for Irish language linguists and translators by the end of 2021. All the appearances are that the Irish language has gone through a revival and is strengthening.
In this context, any move towards increasing the Irish language programme is to be welcomed and encouraged. If my understanding is correct, will the increase be directed towards extra Irish language programming? Are there any intentions to go further and up the number of hours again? All the signals point to a revival of the language and this is something we should seek to encourage in the House. Will the Minister comment on it?
I know it is an issue close to the Chairman's heart. The funding of TG4 was reduced by €500,000 in 2015 and this reduction, combined with an increased pressure on commercial income due to competition in the broadcasting market, made TG4's budget exceptionally challenging and impacted on the station's ability to deliver on its commitments for 2015. For example, TG4 was unable to increase its hours of new and original Irish language content in 2015, as originally planned. An additional €300,000 in current funding has been provided in 2016 to assist TG4 in meeting its obligations and allow it to compete by producing more home-produced content to help distinguish itself from international channels. The moneys paid to TG4 are key to ensuring the continued access to a comprehensive range of programming in the Irish language. TG4 will continue to maintain cost efficiency on commissioned programmes and in-house productions and to control its overheads and costs to maintain a lean and cost-effective structure.
Investment in new, innovative Irish language programming and content will help retain and grow TG4's audience for its scheduled and online offering. The Fios Físe project is an initiative devised specifically in response to the Broadcasting Authority of Ireland's five-year review. It sees the creation of a new audience measurement tool for TG4's core audience, which will furnish weekly quantitative and qualitative audience data and information to TG4 from a panel of 350 viewers using online reporting methods. TG4 broadcasts 24 hours a day and in 2015 it broadcast an average of 4.8 hours of new original Irish language content output per day. Total Irish language broadcast hours were 5,021 in 2015, some 57.3% of the total broadcast hours.
TG4 ensured that 75% of all public funding in 2015 went directly into the production of Irish language programming content, which is above its commitment of 70%. The remaining 25% is spent on its broadcast and related activities. TG4 commissioned almost €21.2 million in programming from the independent production section in 2015 and included 680 hours of new Irish language programming in addition to more than 700 hours of re-voiced material and subtitling.
In fairness to TG4, it has some of the most innovative programming. Most public representatives do not see a lot of television but some of the programmes I do see are those on TG4 and these do not just relate to sport. Its programming has been innovative in terms of history and new types of programmes, particularly those for younger people. It must be remembered that the vast majority of content that younger people are accessing is coming in from and being broadcast by production companies outside the European Union. It is important that we have good quality content and both TG4 and RTE provide it through their television channels.
In a competitive and challenging market, TG4 achieved a national audience share of 1.8% in 2014. In 2013, it was 1.7%. The national share should be viewed in the context of the decline in the viewing share of the major channels broadcasting in Ireland and increased competition arising from multiple channels offered on cable and satellite. I must say that I think TG4 has really tried to reach out to those outside of its traditional catchment and outside of Gaeilgeoirs in Gaelscoileanna even. It has innovatively used sport as a mechanism to do that. If we are determined to support the Irish language, we should be determined to try to get the language to a farther broader catchment than it does at present.
This is my last one. Would the Minister consider bringing his NewERA team to look at RTE's options in terms of alternative sites for RTE? Could we look at Moore St. for example? It is a big development area in the centre of town. We could put RTE back where it started near Henry St. and the centre of the foundation of the State. We could launch thousands of new Eircode addresses for homes in the 35 acres in Donnybrook, half of which at the moment is rolling meadow or carpark, which is a ridiculous use of space close to the centre of town.
I have a supplementary question on TG4. I agree with the Minister's comments. GAA Beo and some of the sporting programmes, in particular, have broadened TG4's audience. I am not sure if it is in the budget or technically possible but an option to switch on and off the use of Irish language subtitles would also be a further aid. People tune in but may struggle with the dialects and the cainteanna can vary. This is something the team could perhaps take away to talk about. I think it would aid education on and the take-up of the language.
I would be quite positively disposed to that suggestion. We still have the old Marconi transmitter in Athlone and are hoping to make a museum and visitor attraction out of it. I look forward to bringing the committee down to visit it when we get it up and running. At the moment the objective is to consolidate the Montrose site. We are examining the possibility of disposing of part of the site and reinvesting the capital. Currently the focus is on the Montrose site and how best it can be utilised and leveraged in the interests of the company. In the longer term, however, I am quite happy to bring it to Athlone.
The focus of programme C is on energy and the delivery of the key elements of the Government's energy policy to ensure a security of supply, competitive energy supply and environmental sustainability.
The programme provides €7.3 million to cover the operational costs of the Sustainable Energy Authority of Ireland, SEAI, and more than €61 million for the better energy grant programmes. The better energy grant programmes operated by the SEAI include the better energy homes scheme to provide grants towards a range of energy efficiency measures to home owners, the better energy warmer homes scheme to deliver a range of energy efficiency measures free of charge to low income households and the better energy community programme to encourage community-based partnerships to improve the thermal and electrical efficiency of the building stock and energy-poor homes.
The three schemes are anticipated to deliver energy savings of 173 GWh in 2016 and provide approximately 9,000 low-income homes with energy efficiency measures - that is 36 homes per day - while continuing to stimulate activity in the retrofit industry, supporting approximately 2,300 jobs. The energy programme provides for expenditure to fund applied energy research along with demonstration programmes and projects. When the committee gets up and running, its members might get the opportunity, no more than myself, to travel around the country. I am hoping to visit the research facilities in Galway and Cork. It might be useful if the committee were to have a public outreach hearing in both of those venues to see what is going on there.
On Brexit, the critical issue for my Department is in the area of energy. We have an all-island electricity market - the single electricity market - in partnership with Northern Ireland. The agreement between the two Governments - the Irish Government and the UK Government - is working and our intention is to continue to progress it. We have a single regulatory system and a single owner, Eirgrid, across the island. It is our intention to work closely with our colleagues in Northern Ireland. This is why the Energy Bill 2016 is of such critical importance. It is to ensure that we have the most flexible single electricity market on the island of Ireland as is possible.
There are also issues relating to gas supplies. The committee is aware that a substantial amount of our gas comes through the UK. There are emergency provisions within the EU regulations regarding gas supplies and share rationing, which, naturally enough, involve the UK at the moment. These will remain in place unless specifically replaced. We will have to see how it works out over the next two to two and a half years in the negotiations.
The other side of this is the fact that we have a strategic oil reserve. Under the International Energy Agency rules, member countries, including Ireland, are required to have 90 days of oil in storage. The EU also mandates that these stocks are held in the European Union. Approximately 20% of our stocks are in the UK and we will have to reach a satisfactory arrangement in that regard but it is not an issue in the short term. It is important to remember that this is a condition laid down by the International Energy Agency. The UK is also a member of the agency and that will not change on foot of the referendum vote.
While there are energy issues that need to be addressed, from a European point of view it is important to remember that our connectivity to the European gas and electricity grids is through the UK. The latter is a major supplier of energy not just to Ireland but to continental Europe. It is in everyone's interests that the energy union being progressed at present include the UK, not just to benefit all member states, particularly Ireland, but also to meet the need for energy security across the European Union so that it will not be dependent on less stable countries - usually those located to the east of the Union.
I thank the Minister for the overview of the integrated energy market. Connectivity with the UK is obviously of concern. Under subheads C4 and C5, there is a consider spend on sustainable energy million. A sum of €58.8 million is the largest line item in the Vote while the energy research programme has a spend of €9.5 million. We debated the Energy Bill 2016 in the House last night, which will become before the committee shortly. The regulator will be given further powers to administer sanctions. The State is investing heavily in sustainable energy as a whole and in research. Given this investment in sustainable energy and research and the strengthening of the regulator, is the Minister any closer to issuing wind energy guidelines? Is that covered under the research or energy programmes? The guidelines were expected three years ago. Before further spending takes place, are we closer to seeing the guidelines? In the context of strengthening regulation and providing assurance to communities concerned about development and the lack of up to date guidelines, it would comfort many people if they were in place.
Overall responsibility for issuing the new guidelines rests with the Department of the Environment, Community and Local Government but my Department has a significant role to play in that. When I was on the other side of the committee room, I grilled my predecessor and the previous Minister for the Environment, Community and Local Government about why this was not happening. There is a commitment in the programme for Government to have the new guidelines in place within three to six months. We are working on them at the moment and I have asked committee members to meet me tomorrow to discuss this issue and ascertain what are their objectives. There have been many public hearings on this. We have all listened to what communities have to say and we have to try to strike a fair balance in this context. There are opportunities in respect of renewable energy as a whole and wind energy, in particular. We need to balance them in the context of the issues that communities have, and how they can have a greater role not just in consultation, which is important, but in respect of the returns that may be generated by these projects. I will thrash that out in greater detail tomorrow with members of the committee and it is my objective to have the guidelines in place as quickly as possible. It would be great if it could happen sooner. There are a number of complexities but our objective is to deliver them within six months.
Does the Department have a best estimate about the status of renewable energy targets for electricity, heat and transport in 2020? I would also add energy efficiency to that within the 20% target we had.
Our objective is to try to achieve the 2020 targets. They are challenging but I am not taking my foot off the throttle on this, nor is the Department. I do not intend to throw in the towel on it. Based on the provisional outturn for 2015, with regard to electricity, for which the target is 40% by 2020, we are at 25.3%; heat, 6.8%, with a target of 12%; and transport, 5.7%, with an target of 10%. We intend to make an announcement later this year regarding RES-H, which will, hopefully, have a significant impact on the figures. We will achieve our targets for electricity or be close to them.
There are a number of issues at the moment that are not directly under my control, which we are trying to resolve to facilitate that happening. We hope to come close to the overall target of 16%. There is no doubt we have a great deal of work to do.
With regard to energy efficiency, the cheapest barrel of oil is the one we do not burn. Significant progress can be made, which is why I said earlier if funding is available under the national broadband plan and it is released later this year, it will be put into energy efficiency at community and domestic level. More can be done in this regard and at public sector level. For example, the largest bill for local authorities is electricity. That could be reduced by 50% if public lighting throughout the State was changed. We are actively working on that and that would provide individual local authorities with additional money to invest in their communities rather than damaging our environment.
The stability programme update for the first time accounted for the risk of the State facing large fines for not meeting EU emissions targets. This relates to renewable targets as well. I do not have the exact figures but if the State misses the renewable targets, there will be fines of hundreds of millions of euro annually because we are nowhere near them. We do not have a snowball's chance in hell of achieving them unless the Department changes what it is doing. Business as usual will not get us there because even that is going into reverse. Energy efficiency does not have the same implications in respect of fines but the overall energy efficiency figures in the output statement, in 2014, the Government had an output target of 405 GW in energy savings but it only achieved 169 GW. There was a CO2 equivalent target of 100 kilotonnes but only 41 was achieved, which is less than half. Across the board, the State is going radically in the wrong direction for all its renewable, energy efficiency and carbon reduction targets and is facing huge costs as well as inefficiencies and so on.
The SEAI pointed out the obvious that if we were to meet our targets and save ourselves the several million euro a year in fines we are facing, we would require a threefold increase in energy efficiency investment and a fivefold increase in our investment in alternative transport systems to take the targets seriously. We have an amazing urgency in this committee to examine how those increases in spending will be provided for these sectors over the next two to three years if we are to meet the 2020 targets. There is no reason to fail to do this but political will is required and it will not be easy for a Department that is used to spending approximately €100 million to ramp up its spending to €500 million or €60 million but that needs to be done. If not, the State will be paying €200 million or €300 million annually in fines. That is not a small task but that is what must be done in two years.
We have put a figure for potential risk in the stability programme. The Deputy would rightly criticise me if I did not acknowledge the potential risk if we do not reach our targets. As he will be aware, having sat on this side of the table, if I am going to leverage the investment I require, I need to have a carrot and a stick.
If we meet bills like this in 2020 I will have far greater leverage to get the investment I require. There is absolutely no doubt that we need more money for energy efficiency. There are, however, issues outside my Estimate, such as carbon tax and the energy efficiency fund. Some good innovative projects are getting off the ground. There is no point investing in something that will not deliver. There have been several very successful pilots. We all read last week or the week before about what Electrical and Pump Services, EPS, has done in Cork, which is effectively a bike to work scheme for energy efficiency among its employees. Can that be expanded and developed on a large scale? There are many more projects, such as the warmth and well-being innovation we are now rolling out in Walkinstown and Tallaght, which has an impact on people with chronic obstructive pulmonary disease, COPD, not only improving the comfort of their homes but also potentially reducing admissions to accident and emergency departments, presentations to general practitioners and visits by public health nurses, which has a knock-on impact on the Department of Health. As I said at the beginning of this meeting, my Department is a facilitative one. We can drive the change and the benefits can be seen in other Departments, such as the Department of housing, planning and local government in respect of public lighting, the warmth and well-being programme and the Department of Health. However, we do need more money, particularly in the energy efficiency area.
There are problems and challenges, not just to get the money but in respect of the financial constraints placed on us by the European Commission. I was five days into the job when I met with Commissioner Cañete and one of the first things I raised with him was the fact that even if we do get the money we could be restricted in what we could spend, which is bizarre because if we do not spend it we will face penalties post-2020. It makes far more sense to spend that money on reducing the amount of carbon that goes into the environment and reducing energy bills for families around the country than on paying fines.
In respect of output figures, we have a million oil-fired central heating systems and we could get rid of the lot of them. We have only a thousand electric vehicles; that number needs to multiply by a factor of five or ten, which would give us benefits in terms of balancing supply, as would getting rid of the oil-fired central heating systems and replacing them with heat pumps. We need to tell the public about the radical nature of what we committed to in Paris. The figures for 2020 are in the ha'penny place compared with our Paris commitment. The Minister has only just arrived in his post and I am not making him responsible for that, but if we are serious about climate change this Department must multiply its scale, activity and ambition three- or fivefold and the Minister has to convince the rest of the Government to allow him do that. There will be health and other benefits.
If tomorrow morning we had the capacity and the funding to replace every single oil-fired central heating system with heat pumps, people would refuse to put them in because they would be afraid of the technology, wondering whether it would fail or it would work, whether it would keep the house as warm as it should be, whether they could rely on the contractor putting it in and whether the contractor would be available if it broke down in a couple of years time. We need someone to certify that it is reliable and sustainable technology.
One of the big concerns about large-scale biomass has been whether we will get the woodchip needed to run those burners if we put the capital investment in at the start. The growing of miscanthus around the country was an unmitigated disaster. There is plenty of elephant grass at the moment. It is a bit like the Christmas tree market some years ago. We need to make sure people invest in the right technology. At the national economic dialogue we said we needed the equivalent of a Teagasc - a respected, State-supported agency that can certify that a particular technology works and will be beneficial to people - for energy efficiency. That is the first challenge, in tandem with making the capital investment. While we do need significant capital investment and a radical change in the short term on that, we need to get the basics right to make sure that when we roll something out on a large scale we have the level of uptake required to make that impact.
I congratulate my constituency colleague on her appointment as chair of the committee.
The natural resources section comprises petroleum services, mining services and Geological Survey of Ireland, GSI, services. The Department’s role in petroleum services includes developing and maintaining an appropriate policy and regulatory framework to underpin oil and gas exploration and production activities, including engagement at national, EU and wider international level, together with the development of the legislation focused on safety, protection of the environment and fiscal terms. The International Energy Agency forecasts that oil and natural gas will remain significant in the world’s energy supply to 2035, and there are significant and sustained benefits to the State and people of Ireland over an extended period of years for oil and petroleum found here.
Mining is undertaken by private industry either under State mining leases for State-owned minerals or State mining licences for privately owned minerals. Ireland ranks as Europe’s second largest producer of zinc metal in concentrate and the eleventh largest producer in the world. In addition, Ireland is Europe’s fifth largest producer of lead metal in concentrate and sixteenth in the world. In terms of the challenges in the Department, there is an extensive programme of remediation works at five of the six identified former mining sites, particularly Silvermines in County Tipperary and Avoca.
The GSI is a division of the Department which does excellent work and acts as the State geosites agency. It manages several nationally strategic initiatives through a few programme budgets which have been amalgamated into a single subhead. There is the Tellus programme, the geological environmental baseline survey, with aircraft flying at 60 m surveying the Galway west area and providing very important data, and Integrated Mapping for the sustainable development of Ireland's Marine Resource, INFOMAR, which is the national seabed mapping programme. INFOMAR will commence phase 2 of the mapping of all remaining areas not already mapped in phase 1 to complete 100% coverage of all Irish waters. There is a significant amount of good work being done, particularly in the GSI’s research strategy.
I welcome the new Minister of State and wish him luck in his portfolio. To answer the question put by Robert Watt, the Secretary General of the Department of Public Expenditure and Reform, to the national economic dialogue, "Where would you save?", one immediate saving we should make is to shut down our petroleum services division. It would not result in a huge saving but there is no moral way we as a State can continue to look for oil and gas when we know that four-fifths of known fossil fuel resources now have to stay in the ground. Oil at $100 a barrel will not be viable.
On a moral and a pure leadership basis, we cannot continue to take oil out of the ground. There is no case for new exploration and we should shut it down. We should not award the 2015 Atlantic margin oil and gas licensing rounds. We should be honest with the developers. We should set ourselves out as a divestment State. This divestment movement is growing across the world in universities, churches and social groups. We have to stop looking for oil and gas, so that is the first saving I would make. We have fine people in the Department and I have nothing against them at all but purely on moral grounds, the Minister cannot sign the licences. If he signs them, then we will not divest and will burn our planet. We cannot do it and we have to stop.
Licences have been signed under the Atlantic margin agreements. As I said, the International Energy Agency forecasts that oil and gas will remain a significant element of the world's energy supply up to 2035. Most of the growth for oil and natural gas in the coming decades is forecast to come from Asia. With the growth in vehicle ownership, it is estimated that Asia will account for two out of every three barrels of crude oil traded internationally, up from fewer than one in two today. The increased demand for natural gas from industry and power generation is projected to raise global demand by 50% by 2040.
We have a responsibility to this country. Obviously, the Minister has clear plans for the renewable sector and how to face its challenges. The world depends on a relatively small number of petroleum provinces that are mainly located in areas of political instability. Ireland is a stable country which may have oil or gas deposits. The international figures are quite startling. Some €900 billion per year is spent on oil and gas development. If Ireland were to strike significant reserves of oil and gas, as a stable political country, it would add to the overall international supply. There are international agreements and we cannot control what China and Asia does. We have responsibilities in Ireland and within the European Union to reduce the use of fossil fuels here. We must also develop renewable resources and within the Department that is going ahead. There are still financial benefits to the State accruing from the possibility of oil exploration.
This is a serious issue. In my time, I saw things done during the interregnum that should not have been done. We should not sign anything in the middle of an interregnum. I have seen it happen on several occasions and it is just not right. It is an issue.
I agree with the point made by Deputy Ryan. I saw it happen in other areas during the interregnum and I welcome us revisiting that. Subhead D3 deals with petroleum services. A sum of €441,000 has been allocated but it is a significant decrease from the previous year's allocation of €4.6 million. That means the budget has been cut to 10% of the previous year. At the same time, it appears that the projected number of licences under active regulation has increased from 60 to 75. We have set a target of 75 licences, which is greater than 60 licences, while at the same time, we have massively decreased the funding allocated to this area from €4.6 million to €441,000. Why has the allocation been decreased?
My second question is related. The current budget is €441,000 for petroleum services and active regulation. What percentage, if any, is geared towards encouraging, engaging with or inviting companies to apply for further licences or leases for gas and oil exploration?
My next query ties in a little bit with a question asked by Deputy Ryan. The Minister has said that the State will benefit from these projects and at least one licence has been signed. What benefits does the State reap from these projects? This matter has been the subject of controversy in the past. What happens with royalties? What are the taxation arrangements? Is there a payback or return for the State? Can the State directly access the resources at a preferential rate? Can the Minister outline the arrangements that are in place? Is it intended to revisit the arrangements for future contracts? Where does this matter sit at the moment?
I shall answer the last question on fiscal terms first. The Deputy is right that there has been a lot of discussion over the period. There have been a number of changes over the years. The latest change took place in 2014 when there was a replacement of a profit resource rent tax with a petroleum production rent tax in respect of new petroleum authorisations and linked to the profitability of discoveries. Also, maximum marginal rate rises from 40% to 55%, with a minimum petroleum production tax of 5% of revenues as soon as a field goes into production. The fiscal terms that apply to production from a petroleum lease are determined by the date of the award of the initial petroleum authorisation. That was a change from 2007 where there was an additional profit resource rent tax of between 5% and 15% introduced and linked to the profitability of discoveries. In 1992, corporation tax was reduced to 25% below the general rate of 50%. There have been changes over the years but the State benefits from oil exploration.
The sum of €4 million was a once-off payment that was received in 2015. It related to the offshore data sales for companies that bid for the licences on the Atlantic margin.
The inland fisheries budget is comprised of €27 million. It provides a grant to Inland Fisheries Ireland, which is responsible for the conservation, management and regulation of Ireland's inland fisheries resource.
The inland fisheries programme includes an allocation of just under €15 million towards the staff cost of Inland Fisheries Ireland and the Loughs Agency of the Foyle, Carlingford and Irish Lights Commission. The Loughs Agency is a North-South body and is co-funded on a 50:50 basis by my Department and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. Also included in the programme is €12 million for non-pay current capital expenditure by the two agencies.
There are a number of programmes. The eel management plan has caused concern in the past. The latest scientific advice is that the status of the eel remains critical and that all production and-or escapement of silver eels should be reduced or kept to as close to zero as possible. There is no change in the perception of the status of the stock as being critically endangered.
There is also a salmon management regime. As part of the IFI's budget, money has been earmarked for salmon management initiatives such as river habitat improvement and fish stock rehabilitation.
We are carrying out a comprehensive review of the IFI legislation, including the consolidation of the 13 Inland Fisheries Acts that date back to 1959.
In terms of challenges facing my Department, one challenge is tackling invasive species. In this instance the National Parks and Wildlife Service is the lead agency and not Inland Fisheries Ireland but it has a role in co-operating with the National Parks and Wildlife Service in that regard.
I have a query about the increase of 2.7% in expenditure on inland fisheries. Given that there was no difference between the output targets based on the revised Estimates for 2016 when compared with the 2015 Estimates, can the Minister of State explain why there has been an increase of 2.7% in expenditure? Does Deputy Lawless wish to ask a question?
We can take them both together. I thank the Minister of State for his overview. He mentioned conservation and the conservation of salmon stocks, in particular. There has been conservation of salmon stocks with the imposition of a ban on certain rivers and fisheries. He mentioned this matter in his opening statement and I him to elaborate a little further on the success of the programme. Has conservation continued under this programme? Where does the matter stand now?
On the Chairman's question, the difference relates to the value of sterling. There is a cross-Border dimension to the Loughs Agency and payments are made there in sterling. Obviously, sterling has changed again since Brexit but there may be savings there.
On the salmon management regime, salmon is a listed species under the habitats directive. The management of salmon is designed to ensure that stocks are appropriately protected and that adequate spawn survives over the winter to ensure the long-term survival of the genetically individual river stock. There are 143 salmon rivers and a counting project is carried out every year to ascertain whether there is a surplus of stock such as to permit fishing. Every year in late autumn to October, there is an assessment and recommendations are given locally as to which rivers are open for fishing. It is very scientific. Every salmon returns to the river where it was born, so it is important to be able to assess the status of every river. That is what has been done. That said, the stock itself is still under considerable threat in the North Atlantic due to predation, sea lice and different things. It is an ongoing process to ensure that we have the best scientific data and knowledge available to maintain the salmon species, which is so important to our angling sector.
The Chairman asked at the outset about Brexit and sterling and we may have a significant reduction in tourism from the English market this year, which affects the country as a whole. However, that includes a significant revenue derived by the angling sector from British tourists. That has an impact. Since 2007, commercial and recreational angling has been restricted to those stocks in rivers which are meeting their conservation limits. That is important because we do not want to see any area wiped out or overfished in regard to this valuable resource.
That is good to hear. I have a supplementary question on salmon stocks and conservation measures. As the Minister of State said, salmon is endangered and listed in the Habitats Directive. It is in peril. There is a focus on recreational angling inspections and restrictions on certain rivers to preserve salmon stocks within them at certain periods, all of which makes a lot of sense. I ask the Department to consider that angling is only one part of the issue. On a good day, an angler might catch one salmon. It might take several days fishing to take one. Someone can arrive at an estuary with a net and pull out 100 salmon in two hours. That is where the problem is, that is, illegal netting around the estuaries with people working off boats and some from jetties and piers. That is the nub of the problem and, as such, I ask the Minister of State whether the Estimate includes inspections and sanctions in that regard. That is where the focus needs to be to really tackle the problem. Anglers are one part of it but by their nature, they tend to value the fish and the species. It is in their interests to perpetuate the stock for themselves and future generations. Netters have no such scruples. I put it to the Minister of State that it is an area that needs careful monitoring, inspections and sanctions where people are found in breach.
Inland Fisheries Ireland is very strong in regard to illegal netting and poaching. There are always challenges in regard to resources but the agency has moved towards newer technologies, for example, patrolling rivers by kayak to cover more ground and hidden cameras to catch poachers. It is very much to the forefront of Inland Fisheries Ireland's mind. I will be meeting the board of Inland Fisheries tomorrow in Dublin and it is certainly something I will raise with it in terms of resources. As with any Department, there is a continued need for additional funding and resources. Certainly, the conservation of fish stocks and preventing illegal fishing and netting are very important to Inland Fisheries Ireland.
We do not have a specific note on programme F, appropriations-in-aid, but we are happy to answer any questions on it.
The Estimate covers proceeds from fines in respect of offences relating to inland fisheries, receipts relating to the Minerals Development Act, the petroleum infrastructure support group, broadcasting licence fees of €22 million, Geological Survey of Ireland income, rent on properties in the GPO and superannuation from agencies received for pension deductions in respect of public service remuneration.
Yes, sorry. There is no income coming in from that. There was income in previous years. That is why it is blank for this year. Appropriations-in-aid are income into the Department. The big income we have in the Department is from the television licence, which passes through us. The Geological Survey of Ireland has fee income and the petroleum division has income where people access our data. Historically, income was derived from the emergency call-answering service, but that is not coming in now. That is why it is zero. The money paid out in respect of it is listed under programme A. This is the service which answers the phone when a person dials 112 or 999 and it refers people to the fire service, the ambulance service and so on.
I will come back to it another time, but there is a problem with the delivery of the service in terms of the workers and their rights. There have been a number of strikes in the area about which I would be interested to query the Minister. I might send him a note individually.
By all means, the Deputy can come back and we will get our officials to talk with her in respect of the matter. On 10 May, the CWU advised Conduit, the contractor, that it was seeking the assistance of the advisory service of the Workplace Relations Commission and disengaging from any further industrial action. We are monitoring that. It is going to the Workplace Relations Commission where, hopefully, the issues can be resolved. There are a number of centres and when the one in Navan went offline the last time, the service was picked up by some of the other centres. From the public's point of view in relation to security, the service has been maintained. Naturally, whenever there is industrial action, it is concerning. I encourage all the parties involved to engage with the Workplace Relations Commission to resolve the issue.
I thank members for their assistance. We will try to facilitate the Chairman, clerk or individual members in any way we can. If Deputy Bríd Smith or anyone else has a query on a particular issue, he or she should feel free to make contact with my officials. We will try to provide as much information as we can. As I have said privately before, I am willing to have debates in the House, but let us make sure that they are based on facts. Let us disagree on policy, whether it is with Deputy Eamon Ryan or anyone else, but let us do so based on the facts.
Traditionally, we have had a situation where the Opposition has been starved of information with the Government holding on to all of the information. I do not want to take that approach. I want us to work together in the interests of all our people and the country.
At yesterday's meeting we agreed to invite the Minister before the joint committee in early autumn prior to budget 2017 to allow the committee to consider expenditure proposals. The committee has asked the Department to provide specific information in the format requested by 31 July 2016. The clerk has corresponded with the Minister's officials on this with a view to obtaining that information.