Oireachtas Joint and Select Committees
Thursday, 16 February 2017
Public Accounts Committee
2015 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 30 - Agriculture, Food and the Marine
Chapter 7 - EU Refunds and Levies in the Agriculture Sector
9:00 am
Seán Fleming (Laois, Fianna Fail)
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We are joined by representatives of the Department of Agriculture, Food and the Marine and the Department of Public Expenditure and Reform to examine Vote 30 - Agriculture, Food and the Marine and Chapter 7 of the Comptroller and Auditor General report 2015 on EU refunds and levies in the agriculture sector.
From the Department of Agriculture, Food and the Marine, we are joined by Mr. Aidan O'Driscoll, Secretary General, and Ms Kay Ryan, Mr. Brendan Gleeson, Mr. Paul Dillon, Mr. Herbert McMahon, Dr. Kevin Smyth, Mr. Martin Crowley and Ms Catherine Healy. From the Department of Public Expenditure and Reform, we are joined by Mr. Terry Walsh.
I remind members, witnesses and those in the Public Gallery to turn off all mobile phones. I wish to advise the witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of that evidence. They are directed that only evidence concerning the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members of the committee are reminded of the provisions of Standing Order 186 to the effect that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such a policy. Finally, members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
I ask the Comptroller and Auditor General to make his opening statement.
Mr. Seamus McCarthy:
The appropriation account for Vote 30 - the Department of Agriculture, Food and the Marine records gross expenditure of €1.26 billion in 2015. The Department was also the accredited paying agency for additional EU payments amounting to just under €1.2 billion for 2015. EU payments directly to farmers are accounted for separately from the Vote, but a summary is disclosed in note 6.1 of the account.
The Vote expenditure in 2015 was spread across four major expenditure programmes: €387 million, or 31% of the total, was spent on agrifood policy, development and trade; €196 million, or 15%, was spent on food safety, animal health and welfare, and plant health; €355 million, or 28%, was spent on rural economy, environment and structural changes, and €326 million, or 26%, was spent on direct payments to farmers.
The Department provides substantial funding each year for a number of public bodies that operate under its aegis. These include Teagasc, An Bord Bia, the Marine Institute, Bord Iascaigh Mhara, Horse Racing Ireland and Bord na gCon. The Department is also directly responsible for management of the six fishery harbour centres, for which separate accounts are also prepared.
A net Supplementary Estimate of €104 million was approved by Dáil Éireann in December 2015. This was required to provide funding of €68 million to finalise European Commission disallowances related to the period 2008 to 2014 and a further €39 million due to an unanticipated delay in receipt of EU funding for rural development in 2015. In addition, the supplementary process reallocated savings on certain subheads of the Vote to fund additional expenditure for fishery harbours, the areas of natural constraint scheme, the World Food Programme and a top-up to the EU market volatility payment.
At year end, net expenditure under the Vote was approximately €69 million less than provided for, including in the Supplementary Estimate. With the agreement of the Minister for Public Expenditure and Reform, €12 million in unspent allocations - mainly under the rural economy, environment and structural changes programme - was carried over for spending in 2016. The remainder of the surplus for the year, totalling €56.6 million, was liable for surrender to the Exchequer.
Chapter 7 of the report on the accounts of the public services 2015 examines two substantial and unusual transactions between the Department and the EU in 2015. The first transaction was the refund by Ireland to the EU of €68 million for non-compliance with regulations governing the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development. In look-back reviews of a sample of land parcel-based payments funded by the EU made in the period 2009 to 2012, the European Commission identified concerns that could have resulted in substantial amounts being disallowed. The Department contested the Commission's findings and conducted a further review of more than 900,000 land parcels on its system using newly acquired, higher resolution imagery. It found that there had been an element of overclaiming in respect of 180,000 of the land parcels, or 19% of the total.
Arising from that finding, the Commission in May 2014 proposed a flat rate disallowance of 2% of funding in the period, equivalent to €182 million. The Department entered a conciliation process to negotiate the disallowance and, in July 2015, agreed with a Commission proposal for a disallowance of €64.1 million for the period 2008 to 2012. A lower rate of disallowance of €3.6 million was agreed for 2013 and 2014, reflecting improved controls. The Department also incurred costs of €3.2 million during the review and negotiation stages, principally for new imagery and software, internal staff costs and external contractor costs. The final agreed rate of disallowance for Ireland for the period 2008 to 2015 was equivalent to 0.8% of the funding provided. This compares favourably with the average of 2.4% disallowance across all EU member states.
The second transaction examined in the report was the handling of milk producers' liability of €71 million to the EU because they exceeded their milk quotas after they increased production in advance of the end of the quota regime on 31 March 2015. Due to a fall in milk prices in 2015, the EU approved an optional scheme allowing member states to pay the liability and then recover it from milk producers over a maximum of three years. Ireland was one of seven EU countries to introduce the scheme.
The Department required milk producers, before they could avail of the deferral scheme, to sign a legally binding agreement to repay their liability. Approximately a quarter of the total liability was paid up front by milk producers who chose not to avail of the scheme. The remaining liability is being recovered in instalments. At August 2016, the Department had recovered over 99% of the amount due to be repaid at that time in line with the instalment agreements.
Seán Fleming (Laois, Fianna Fail)
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Before engaging with the Department of Agriculture, Food and the Marine, I wish to address a question to the Comptroller and Auditor General. People might be surprised. Mr. McCarthy stated that, although the Department's Vote was essentially €1.26 billion, the Department "was also the accredited paying agency for additional EU payments amounting to just under €1.5 billion for 2015." Those payments were accounted for separately from the Vote and are summarised under miscellaneous in note 6.1 to the account. Where are these payments accounted for? I would have expected the €1.5 billion to form part of today's work. The Department is the paying agency for these EU payments, but take me through the process. What is before us today is just the Department's own Vote, which excludes the €1.5 billion in payments to farmers. Who audits the accounting of these payments and when is that presented to the committee? Logically, should it not have formed part of today's work?
Mr. Seamus McCarthy:
The additional figure is €1.2 billion on consolidation. Explanatory note 6.1 is provided in order that there is some opportunity for the committee to discuss these amounts with the Department, but there is a separate accounting system for them under EU rules. The Secretary General will be able to elaborate further.
There are other funds that come from the EU. A number of years ago, it was agreed that there would be a consolidation account to give a view to the committee of EU transfers to Ireland that did not go through appropriation accounts. That account is produced and it is audited by me. It is submitted. I do not recall when it was noted by the committee.
It was just signed at the end of the year, was it not?I do not think it has been presented yet but it can come before the committee for examination.
Seán Fleming (Laois, Fianna Fail)
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Does all that money go into a central fund or is there another fund? Mr. O'Driscoll can help us. There is a simple question: €1.2 billion in payments is going through the Department which are not part of the account but is included under section 6, "miscellaneous", on page 26 of the Vote of the Department under EU funding by way of a note. It is not the record of the accounts, it is not the audit and I would like that account to be sent to the committee during the week. Mr. O'Driscoll can understand our question as to why those payments are not part of today's discussions. Will Mr. O'Driscoll help us on this point before we discuss his Department?
Mr. Aidan O'Driscoll:
To put it into context, the Common Agricultural Policy, CAP, has what are commonly referred to as two pillars. Pillar 1 relates to the €1.2 billion the Comptroller and Auditor General referred to. These are direct payments to farmers that are fully funded by the EU. Pillar 2 refers to the various schemes encompassed in the rural development programme. These are co-funded by the Exchequer and the EU. They appear in our Vote because they are co-funded by the Exchequer and are part of the Vote. These include the rural environment protection scheme, REPS, and the green low-carbon agri-environment scheme, GLAS, or the disadvantaged areas, now areas of natural constraint scheme, which appear in the Vote. The basic payment scheme, the greening payment and the young farmer top-up-----
Seán Fleming (Laois, Fianna Fail)
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The single farm payment.
Mr. Aidan O'Driscoll:
The successor to the single farm payment. They do not traditionally appear in the Vote. As the Comptroller and Auditor General said, however, a decision was made a few years ago to include reference to it in his report. I presume that then allows the committee to refer to it as it wishes.
Seán Fleming (Laois, Fianna Fail)
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Does the chapter 7 before us today refer to Pillar 1 or Pillar 2?
Seán Fleming (Laois, Fianna Fail)
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It is a co-funded programme.
Mr. Aidan O'Driscoll:
No, to be clear, the disallowance, for example, refers across Pillars 1 and 2. I know this stuff is a bit arcane but nevertheless when the Comptroller and Auditor General referred to the European Agricultural Guarantee Fund, EAGF, and the European Agricultural Fund for Rural Development, EAFRD, which are two EU funds, the EAGF is Pillar 1 and the EAFRD is Pillar 2. The disallowance refers across but when a disallowance is paid by the Exchequer it materialises on the Vote as an amount.
Seán Fleming (Laois, Fianna Fail)
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Of the €68 million in this special report today, how much is Pillar 1 which is not part of the Department's Vote and how much is Pillar 2?
Seán Fleming (Laois, Fianna Fail)
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Why is it here part of the Vote if it is not part of the Vote.
Seán Fleming (Laois, Fianna Fail)
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Is Mr. O'Driscoll the Accounting Officer for the Pillar 1 payments?
Seán Fleming (Laois, Fianna Fail)
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Does Mr. O’Driscoll have an account of the Pillar 1 payments?
Mr. Aidan O'Driscoll:
The other title I have is head of the paying agency. In Ireland, unlike many other countries, the Department of Agriculture, Food and the Marine is the paying agency. Other countries have agencies such as the rural payments agency in the United Kingdom which is outside the Department for Environment, Food and Rural Affairs, DEFRA. I am the head of the paying agency in Ireland. We produce certified accounts. We also have a body called the certifying body, a private accounting firm that we pay for but which reports to the Commission. BDO Ireland is currently the company. Many of the major companies would have had that account over the years. It goes to tender from time to time.
Seán Fleming (Laois, Fianna Fail)
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This gets more intriguing as we go along. If Mr. O'Driscoll is the Accounting Officer for that, when was the last account? Are the 2015 accounts fully audited for that account?
Seán Fleming (Laois, Fianna Fail)
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Does Mr. O'Driscoll go to the public accounts committee of the European Parliament to account for his work?
Seán Fleming (Laois, Fianna Fail)
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It is a bit unusual that the payments are coming through an account that is not before us but the fine is coming through one that is. People might find it a bit strange because we are not dealing with the nitty gritty of the schemes at the moment but the EU payments are very substantial in the Irish context and we are dealing with the Department of Agriculture, Food and the Marine but most of the payments are not before us. When were the 2015 accounts signed off, or have they been audited?
Seán Fleming (Laois, Fianna Fail)
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Submitted to who?
Seán Fleming (Laois, Fianna Fail)
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It did not come through the accounts that we deal with.
Seán Fleming (Laois, Fianna Fail)
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Before we get bogged down we will request a copy of those accounts which could be laid in the Dáil today, tomorrow or next month to be sent to us. I cannot complete the work on the Department of Agriculture, Food and the Marine without sight of how that €1.2 billion-----
Catherine Connolly (Galway West, Independent)
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We can see it in the library when it is there.
Seán Fleming (Laois, Fianna Fail)
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-----was dealt with. The witnesses can understand that. It is not a criticism of what is front of us but that is only 50% of the story of the payments that go through the Department and Mr. O'Driscoll as a paying agent - I am putting the two together - especially if the fine relates to Pillar 1, which is not before us but we have to pick up the tab. Are there no arrangements in place given that the payments come through Pillar 1 that whoever is responsible should pay the fine? Why is it falling to the Department? Can it not be attributed back like the super levy to individual farmers? I am not suggesting it should but the milk levy was sent back to farmers to pay, not to the Exchequer. Is there not a similar arrangement in place for this for those who over-claimed because the taxpayer is picking up the tab for that whereas the farmer has to pay the super levy fine directly? Will Mr. O’Driscoll explain the two different processes?
Mr. Aidan O'Driscoll:
The Comptroller and Auditor General has set out some of the history of the disallowance. It started with a threat of flat rate disallowances which if they had come to fruition in that form, and the Commission was very attached to that approach, would have been a flat rate cut across our payments. It would be difficult to attribute that to farmers except as a flat rate cut across everybody's payment. By implication the problems the Commission says it found would not have been present on every farm so it would have been quite difficult in Irish law to sustain the idea that a flat rate cut be made across all farmer payments. As the history of the disallowance went on, Ireland's basic point of contention with the Commission was not that there was no fault. We did not try to maintain that position but we did say the fault was such that it could be quantified and did not merit a flat rate correction. In the Comptroller and Auditor General's report there is a figure which shows the evolution of the negotiation.
Seán Fleming (Laois, Fianna Fail)
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Can Mr. O'Driscoll bring this to a quick conclusion? The Department was able to identify it but the taxpayer will pick up the bill.
Mr. Aidan O'Driscoll:
No. The bottom line would be - if the Chairman wants to cut straight to the chase - we could have attributed part but not all of the disallowance to individual farmers, but the Government made a policy decision to take the bulk of it on to the Exchequer, and I can explain why. Some money had already been collected from farmers. There is reference in the Comptroller and Auditor General's report to €950,000 in this regard. There was a subsequent amount of €3 million collected, which I can also explain. Of course, it is important to say that farmer payments were cut as a result of the LPIS review undertaken in 2013.
Seán Fleming (Laois, Fianna Fail)
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I ask Mr. O'Driscoll to explain what LPIS is.
Seán Fleming (Laois, Fianna Fail)
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Was that a criticism of Mr. O'Driscoll and his predecessor, who was the paying agent?
Mr. Aidan O'Driscoll:
It is a criticism of both farmers and the Department. That is how I would put it. Obviously, farmers are the ones who declare the area they have that is eligible and they can see on the ground what is eligible. A farmer knows if he or she has built a house on a piece of land that it is no longer eligible so he or she should take it out of the calculation. We have a policing responsibility to try to find out if farmers make false declarations. We have used various techniques to do so, but key to it was the orthoimagery or, in other words-----
Seán Fleming (Laois, Fianna Fail)
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Satellites.
Mr. Aidan O'Driscoll:
Well, imagery from planes and satellites and so on that helped us to determine whether land was eligible. We passed some photographs to the secretariat. I do not know if they have put them on the screen. What the Commission found was that our imagery and so on was inadequate and, therefore, we had inadequately pursued the offending farmers. Could the previous slide of the presentation be shown?
Seán Fleming (Laois, Fianna Fail)
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We understand. Roads can be put in across land-----
Mr. Aidan O'Driscoll:
It is rather the contrast between the two sides of the picture shown on the screen. The picture happens to be of a semi-urban area but it makes the point anyway. Prior to 2013, we had the imagery shown on the left. If one of the other slides could be shown, it would be clearer. Could the next one be shown, please? This is farmland. One can see the clarity of the image on the right is far greater than the clarity of the image on the left. Key to this was that the Commission felt that the imagery we were working off was inadequate and, as a result, it found that land that the farmer had declared as eligible, and which we had accepted as eligible, was ineligible. In 2013, we acquired new higher-quality imagery, which is shown on the right of the slide. Obviously, this made it much easier to determine what was and was not eligible.
Seán Fleming (Laois, Fianna Fail)
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Will the Department make a large investment in drones and cameras to get this right for the future?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Farmers would buy guns to shoot them down.
Mr. Aidan O'Driscoll:
I would see that as a risk. The images on the screen come from planes and satellites. However, there was a particular difficulty in that, as the committee knows, Irish weather is what it is and we have much less opportunity to get clear photographs. The imagery on the right of the screen derives, I think, from better use of satellite photographs, oddly enough, because satellites can adapt more quickly to lack of cloud cover, whereas with planes, one must arrange in advance that the plane will fly over on a particular day, and if there is cloud cover, that is it.
Seán Fleming (Laois, Fianna Fail)
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After all that, I ask Mr. O'Driscoll to make his opening statement. His point about all the payments not before us today is well made. We want to see those accounts and we will discuss that.
David Cullinane (Waterford, Sinn Fein)
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I wish to make a very small point for the sake of clarity for later. Mr. O'Driscoll talked about the policing of this. I imagine random testing would take place.
David Cullinane (Waterford, Sinn Fein)
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Obviously, then, if one gets results back, they would give an indication as to the extent of the problem in terms of eligibility versus non-eligibility. Does Mr. O'Driscoll have a percentage of what he thinks-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Errors.
David Cullinane (Waterford, Sinn Fein)
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I refer to farmers' errors. Is the figure 5%, 10%, 15% or 20%? Has the Department made such a calculation?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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There are always spot checks.
David Cullinane (Waterford, Sinn Fein)
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I know, but the spot checks only give us a glimpse.
Seán Fleming (Laois, Fianna Fail)
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Deputy Cullinane's point concerns the detail of what we will be discussing and we will ask Mr. O'Driscoll to answer his question. We are delving into a specific matter that will be raised later. My point started as a general point and the Deputy's point is one that will be answered during the course of the meeting. We will come back to it. After all that, I now ask Mr. O'Driscoll to move on to his opening statement.
Mr. Aidan O'Driscoll:
My opening statement will be relatively short. I am sorry but it covers much of the ground already covered by the Comptroller and Auditor General. Nevertheless, I ask the committee to bear with me.
The Department's gross allocation for 2015 was €1,260 million, including a capital carry-over of €18 million from 2014. Towards the end of 2015, the Department sought a Supplementary Estimate, which provided funding to address the exclusion by the European Commission of €67.6 million from EU funding of various agricultural schemes for the seven-year period 2008 to 2014, to which I will return again. It transferred savings in certain areas of the Vote to fund expenditure under the fisheries harbour scheme, the areas of natural constraint, ANC, scheme, the world food programme and a top-up to the EU market volatility payment, as well as providing an increase of €39 million in the Department's permitted net expenditure to deal with a Commission decision, applying to all member states, to delay payment of some of their expected 2015 rural development receipts.
Gross expenditure in 2015 was €1,264.6 million, and appropriations-in-aid were €438.7 million, resulting in a net expenditure of €826 million. Gross expenditure savings amounted to €60.5 million and €12 million of the capital saving was carried over into 2016. When the Supplementary Estimate was under consideration in late 2015, we were confident expenditure levels would be lower than the original provisions under some subheads, so some €36 million was transferred as part of the supplementary to other areas of the Vote. Our view at the time was that it would not be prudent to reduce allocations further, given the outstanding potential requirements, particularly in the agri-environment schemes, food safety and research. In retrospect, given the eventual savings, it may be that less funding could have been requested by way of a supplementary allocation. However, receiving the additional allocation did allow us to fully address a number of new pressing needs without compromising our existing schemes.
The Department is exceptional, as alluded to by the Chairman, in also being responsible for large EU payment schemes which do not appear on the Vote. In 2015, these amounted to expenditure of €1.2 billion. The total expenditure by the Department, though the Vote and the fully funded EU schemes, therefore, amounted to more than €2.4 billion.
During 2015, the agriculture and food sector continued to play a vital role in Ireland's economic recovery. Food and drink exports reached €10.8 billion, marking growth of more than 51% since 2009. As this export figure does not include things like hides and skins and forestry, the total export figure from the sector was well north of €11 billion.
The year 2015 was also marked by a number of major policy and operational developments, including the implementation of new Common Agricultural Policy, CAP, schemes following the 2013 CAP reform, the adoption of the new co-funded €4 billion rural development programme and the €240 million seafood development programme, publication of the new overarching sector strategy Food Wise 2025, publication of a new forestry strategy and, crucially, the abolition of EU milk quotas. The implementation of a large range of new schemes and measures was a major challenge for the Department but one to which our staff responded with great commitment and skill. Among the new schemes implemented in 2015 were the new basic payment scheme, greening payment and young farmer top-up, which together accounted for the €1.2 billion I have already mentioned; the green low-carbon agri-environment, GLAS, scheme, two tranches of which were opened to 38,000 beneficiaries in 2015; the new organic farming scheme; the beef genomics programme, which is a very innovative programme focusing on delivering accelerated genetic improvement in the national herd to deliver both environmental and economic sustainability; and the new targeted agricultural modernisation schemes, TAMS II, investment support vehicle, which includes the young farmer capital investment scheme, the dairy equipment scheme, the animal welfare, safety and nutrient storage scheme, the low emission slurry spreading scheme and the pig and poultry scheme. Many schemes were opened in 2015.
As noted in Chapter 7 of the Comptroller and Auditor General's report, milk quotas in the EU were abolished on 31 March 2015. Milk production in Ireland in 2015 was 6.6 million tonnes, an increase of 13.3% on the 2014 annual total. The vast majority of this increase was in the post-quota timeframe, bearing in mind that it ended on 31 March.
While farmers continued to make substantial efforts over recent months to manage their supplies, the ending of the milk quota regime saw significant production over quota in the 2014-2015 year, the final year of the quota regime, resulting in a levy being incurred by Irish producers amounting to €71 million. Facilities for farmers to pay the bill in instalments and to help them to deal with the cashflow challenge were put in place by the Department following European Commission agreement. It was pressure from Ireland and several other member states which led to the system being put in place.
The Department was required to pay the superlevy in full to the European Commission by the usual deadline of 31 November 2015 with the terms of the scheme requiring farmers to repay minimum one third payment each year between 2015 and 2017. The Department paid almost €71 million, of which €35.6 million had been collected from producers with the remainder sourced from funds the Department had on deposit. Just over 2,700 producers opted to pay levies of €16.7 million to the Department upfront by 1 October 2015. They elected not to use the provision to defer their payments. The remaining 3,700 producers paid €18.9 million to the Department by 1 October 2015 and agreements were signed with those farmers to repay the balance of €35.6 million in 2016 and 2017.
A second issue in the Comptroller and Auditor General's report relates to a large EU expenditure disallowance in 2015. In mid-November, the European Commission adopted a decision to exclude a total of €278 million from 18 member states. The net Irish disallowance amounted to €67.6 million from EU funding of various agricultural schemes for the seven-year period, 2008 to 2014, inclusive. This consisted of two elements, namely a €64 million exclusion for the period 2008 to 2012 and a €3.6 million exclusion for 2013 and 2014. It represented 0.57% of the €12 billion in EU funding for these schemes in this seven-year period. The exclusions related mainly to Commission findings that some aspects of Irish control systems were insufficiently robust at excluding ineligible land from payments to farmers in EU funded schemes.
This decision was the outcome of a prolonged process which began with a proposed exclusion of €181 million for the five years between 2008 and 2012 suggested by the Commission in May 2014. The Department opposed the application of the proposed flat rate correction and sought a hearing with the EU Conciliation Body. The Conciliation Body acknowledged the amount of work done by the Department in reviewing over 900,000 LPIS, land parcel identification system, parcels to identify and exclude ineligible areas to calculate the risk to the fund.
The report of the Conciliation Body in early 2015 concluded that the Commission and the Department should continue discussing the matter with a view to settlement. The implication of this moved us away from the idea of a flat rate correction. During the year, the Department undertook considerable additional work at the request of the Commission to give assurance to the calculated risk and was subject to a further verification audit by Commission officials. The reduction of over 60% in the final correction clearly indicated the Commission's acceptance of the Irish approach.
From 2008 to 2016, the total EU disallowances incurred by Ireland amounted to 0.79% of agricultural expenditure. This compared with an average of 2.74% for all member states. These figures are an update on those in figure 7.4 in the Comptroller and Auditor General's report.
Seán Fleming (Laois, Fianna Fail)
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I thank Mr O'Driscoll for his opening statement. I call Deputy Bobby Aylward.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I welcome Mr. Aidan O'Driscoll and his strong contingent. The Department's officials came in force today. They should be able to answer any questions we ask.
Farming is the largest indigenous industry in this country. The Department's spend on schemes comes to €2.76 billion every year. It is the third largest departmental spend after health and education.
Alan Kelly (Tipperary, Labour)
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It is the fourth. The Department of Social Protection spends a bit too.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Yes, I agree. It is the fourth. Although it is not in the Comptroller and Auditor General's report, I want to raise the implications of Brexit. It is coming down the track next month when the British Prime Minister instigates it. Has the Department thought about the impact of Brexit on our trade between Ireland and Britain? Trade to and from Britain comes to €1.2 billion a week. Britain, our nearest neighbour, is our largest trading partner. Has the Department contingency plans in place, considering how important the agrifood sector is to our economy?
Mr. Aidan O'Driscoll:
Speaking to some stakeholders recently, I described Brexit as the most important negotiation the agrifood sector has faced since the 1972 negotiations to enter the then EEC. I completely agree with the importance the Deputy attached to it. The UK accounts for approximately 40% of our agrifood exports. Some sectors are much more exposed than that. About 50% of our beef exports, for example, go to the UK. This is particularly crucial because the UK beef market is the highest priced beef market in the world. Accordingly, the importance of that to the beef sector is obvious.
Other subsectors, such as the mushroom industry, consumer foods and horticulture, are exposed sectors to the UK market in a number of different ways. Their exports are heavily concentrated on the UK but they are also subject to import competition from the UK.
Within the dairy sector, the exposure is somewhat less. Nevertheless, within some subsectors of that it is high. For example, we produce a lot of cheddar cheese in this country, of which 60% goes to the UK. This is a particular challenge because no one eats cheddar in such quantities. We cannot just divert the cheddar off to France. There are many challenges built into Brexit.
Have we done preparations for this? The Minister for Agriculture, Food and the Marine has pointed out on several occasions in public that the day he was appointed I handed him a large file of briefings, a large chunk of which were on Brexit. It showed the research work we had done well in advance of the UK referendum. We have been working hard on it since. We were one of the first, if not the first, Department to set up a dedicated Brexit unit. We have set up an elaborate process of consultation with stakeholders, which is our norm in major negotiations. We have done this before in Common Agricultural Policy, CAP, and trade negotiations. I must acknowledge the first-class quality of input we have received from farming and agrifood industry organisations, the co-ops and so on.
As for the negotiations, we are engaging in an intensive round of discussions with the Commission, other member states and with the UK and Northern Ireland to make clear to them how important this issue is to Ireland and to put forward our demand. Our demand is crystal clear. We want to retain unfettered access to the UK market after whatever happens. We also want to keep the UK market as a valuable market for the future.
We also have a major challenge on the fisheries front. The Common Fisheries Policy is a complex construct. In fisheries, one has this unique fact of a single common resource, the fish in the sea. That resource has to be divided up and the Common Fisheries Policy is how we do this. The UK accounts for a large proportion of EU fisheries waters. UK waters account for one third of the catch of Irish fishing boats, for example. The issues around fisheries are complex.
Are we doing any work on contingency planning? A second strand of the work we are doing involves engaging with the agriculture sector, but also with the Commission and with our colleagues in the UK, especially in Northern Ireland, on the practicalities of managing any kind of border with exports and imports after Brexit. I have told several sectoral groups that we have to negotiate strongly and clearly for the absolutely best outcome. We also have to prepare for the worst outcome.
It would be foolish not to do both of those things. That is a flavour of what we are doing. I am happy to elaborate in more detail if the Deputy wishes.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I welcome Mr. O'Driscoll's response. I am relieved to hear that the Department is taking the matter seriously.
On compliance issues and the reviews from 2009 to 2012, perhaps Mr. O'Driscoll would outline why the issues identified by the Commission, in terms of non-compliance on behalf of the Department, arose. Why did the Department not comply with the requests?
Mr. Aidan O'Driscoll:
There were a series of audits. The Department is subject to EU audits all of the time. I do not wish to in any way minimise the importance of the disallowance because it is a very large disallowance and we are unhappy that we incurred it but this matter needs to be looked at in the context of the overall scale of the Department's payments and the size of disallowances in other member states. The disallowances in other member states that are much larger than in our case are in member states that have excellent records. They are not in member states in respect of which one might take the view that that is to be expected. Why did it arise? The primary reason is that when the Commission came here on various visits it identified issues on the ground. When the Commission visits in the context of an audit it looks at a sample of files. It looks particularly at a sample of cases in respect of which we have conducted inspections. They also visit a selection of farms. They then move randomly from the farms selected into neighbouring farms, for example, or other farms in the same areas. The Commission makes its own judgment on whether land is eligible or not.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I presume these are spot checks.
Mr. Aidan O'Driscoll:
Yes, and they are regular. We have EU audits all of the time on all of our schemes. As the Deputy said earlier, the EU is putting enormous sums of money into these schemes and so the level of audit is not surprising. We do not have any difficulty with the fact that EU auditors investigate and trawl through the schemes in great detail. We are visited by auditors from a number of different units in Brussels as well, as I mentioned earlier, by the certifying body, which is the private accounting firm in Ireland that works on behalf of the Commission. We have all of those audits going on all of the time.
In this case, there was a series of audits from 2009 onwards. These audits would usually have been brought to a conclusion much earlier than occurred but there were a number of things that happened. We gave a robust response to each of the audits. We raised issues where we thought the Commission had got it wrong. The Commission engaged with us in this regard. There is a good deal of respect in Brussels for Irish systems. I do not believe they think we are engaged in anything nefarious. There was a lot of engagement but also a delay due to a tragic death of a Commission official who was key to the investigation which knocked back the audit for another period. It was 2013 before it came to fruition. By then, we had undertaken a large review of 900,000 parcels. A land parcel is, in most cases, a field or part of a field. We undertook a very detailed assessment of all of the land parcels. I know from talking to senior officials in Brussels that they were struck by this. Other member states had generally taken the hit and tried to negotiate a lower flat rate correction and so people in Brussels were struck by the fact that we undertook such a detailed re-assessment of the land parcels. In the process of that assessment, using the imagery which was shown earlier on screen, we found problems.
As Deputy Aylward will be aware, Ireland is marked by a lot of marginal land. The assessment of whether land is eligible or not is a tight assessment. There are some instances of where land is clearly ineligible. For example, if a house is built on a field that land is clearly no longer eligible. In situations where rushes or scrub encroaches on a field there is an assessment to be done and a judgment to be made. The orthophotography is very useful in, at least, pointing us in a direction to indicate where land might not be eligible. We conduct 5% inspections. We are required to do so by EU rules around land eligibility. The final disallowance includes a number of different elements, some of which we could have collected from farmers because it was possible to pin a disallowance to an individual farm but the bulk of it could not have been collected. Of the €67 million, the amount that could have been identified to farm level would have been, maximum, €20 million. The nature of the disallowance was extrapolated in nature such that it could not have been pinned on an individual farm.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I note that €0.95 million was recouped from farmers. Is Mr. O'Driscoll satisfied with that? In my case, an area was overgrown with bushes and I incurred a cut. I did not incur a penalty but I did have to accept a cut from then on. Is it right that the taxpayer should pay the fines incurred by the Department? Should there have been greater pursuance of individual farmers for money owed?
Mr. Aidan O'Driscoll:
Yes we could have done so regarding the €20 million. This is where I hide behind the policy decision read out earlier. I will go through the debt, which may be helpful. The debt for the years 2013 and 2014 was very low. There was only €3.6 million of a disallowance for those years. The reason it was so low is because, effectively, the Commission was happy with the systems we had in place by 2013, for example, the orthophotography and so on.
On the other debt, which is the €64 million for 2008 to 2012, of that €950,000 had already been paid to the Commission and so that amount fell away from the subsequent amount. There were then a number of what are called "specified risks". These amounted to €21 million and were determined by the Commission. This related to the kind of issue mentioned by the Deputy. It may seem extraordinary but what weighed very heavily on the Commission was that in three individual cases more scrub was found adjacent to a hedge than we had allowed for. Another issue rose in respect of an incorrect percentage reduction for scrub. For example, there could be a field which has grass and animals but some of it is scrub. The question that arises is whether to apply a percentage reduction of 20%, 40% or 50% to that field. Another case involved a garden that was included in parcel. I am told that the crucial issue was that there were some children's toys on the land and that resulted in it being identified as a garden. Those specified risks which the Commission determined and then extrapolated across the country amounted to €21 million. It would have been difficult to pin those on individual farmers.
We collected another €3 million from farmers in December 2014. We did not send on that money to the Commission and so it does not appear in the figures we have given. It will appear in the 2016 Vote because it brought to account in 2016.
One could include that as something also farmers have carried.
We then had another €19.8 million, which was for 2008 and 2009. There is a provision in EU legislation which provides that debts must be collected within four years from the date of the debt accruing and this was outside that period. Although maybe, theoretically, one could have identified this at farm level, by the time this was all resolved it had gone beyond that time limit.
One then had a remainder of €16.4 million, after the deduction of all of those figures. No, I apologise, I forgot about another €3 million, which is the carryover on commonages. Commonages have been a regular feature of difficulty in EU audits. Anybody who is familiar with commonage land will be aware it tends to be very high up in hills. It is almost always marginal. It has all the issues that I have just identified but it has the additional complication of multiple owners. Commonage also came into it for €3 million. The final figure was €16.4 million, which could have been then pinned on farmers. What could have been pinned on farmers was the €16.4 million, the €1 million that we did and which was sent to the Commission, and the €3 million which we did and which will be brought to account in 2016.
The one other thing I would say about the cost of this to farmers is what does not appear in those figures is that farmer payments in 2013, after all this was done, were €12.5 million less than they would have been. Of course, that is a permanent loss because that goes on. As a result of the new determination of what land was eligible, farmers got €12.5 million less than they would have got in 2013.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Can I ask, just because we will have to move on to other matters, how in the negotiations did the Department get the EU to come down on the figures? They were looking for a lot more and the Department got it reduced. I just want to know on what grounds did it yield on that. That is the last question I will ask on this.
Mr. Aidan O'Driscoll:
It was sheer bloody-mindedness by my colleague, Dr. Kevin Smyth, and his colleagues, some of whom have since retired, and to whom we owe a debt of gratitude. As I say, and I am not blowing smoke here, I know that colleagues in other member states and senior colleagues in the Commission were quite surprised that we did not lie down and just take our bigger hit, particularly with the 2% flat rate, but there was a very strong feeling among our own staff that this was wrong and that we had a case. Therefore, the case was fought through all the various stages that are identified in another graphic in the Comptroller and Auditor General's report, each of which steps, if the Deputy likes, I could take him through. One will see, in summary, the blow by blow we went through there as we put our first figure of €33 million on the table and we continued to engage with the Commission. Its representatives said, "Well, all right then, but what about this? What about that?", and we went off and we looked at this and we looked at that. The figure crept up and, eventually, the Commission offered this final figure of €67 million, which we could have contested again. We could have said, "No, we are going to court." That was the next step but I think that would have been very unwise for all kinds of reasons. We had got it down to a reasonable level. One has to maintain a relation with the Commission.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I must compliment the Department on getting it down.
I want to move on to milk quotas indemnity. I welcome the three-year-----
Seán Fleming (Laois, Fianna Fail)
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The next point will be the last.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is my time up already?
Seán Fleming (Laois, Fianna Fail)
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Time flies.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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God bless us. I am only starting. I have a whole lot of questions to ask.
Seán Fleming (Laois, Fianna Fail)
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The Deputy will get round two.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will get another chance.
On the milk quota, I welcome the three-year chance for farmers to pay it back. The price of milk had dropped, the market fell away, the quotas had been disbanded, the farmers were prompted by everyone, including the Department and politicians, to get into more milk and then the bottom fell out of it. Can the Secretary General outline the Department's rationale for the introduction of the instalment scheme? I want to know how many producers are behind in their payments and the value of the arrears outstanding, and how will the Department recover these arrears. I note the Department has half the money already but it has still two more years to go.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is almost clear then.
Mr. Aidan O'Driscoll:
Yes. We have no intention of giving up on the €50,000 either - just to get that message out. We would be pretty confident on this one. Dairy farmers are familiar with superlevy payments. It is not the first time they have incurred superlevy payments. They do know that this was of particular benefit to them.
Interestingly, 2,700 farmers decided to pay upfront. They decided not to use the deferred option. I can actually understand that. If one had the cash at that time, it was a matter of just getting it off one's back and going. In fact, those who opted for-----
Seán Fleming (Laois, Fianna Fail)
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If the farmer paid the superlevy fine upfront, could he or she write it off against tax?
Seán Fleming (Laois, Fianna Fail)
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Mr. O'Driscoll will find out. That might be an incentive to pay it upfront. I merely make the point.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Can I come back in?
Seán Fleming (Laois, Fianna Fail)
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I am sorry, the Deputy can finish the next point.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have a complaint about the targeted agricultural modernisation schemes, TAMS. As a politician and farmer, many people have made representations to me about trying to build for dairying, trying to get dairies right and milk machines etc. in starting up in the business. I spent three or four frustrating months getting on to the Department to get the all-clear for the farmers to go and build to start milking in the spring, in January and February, like most do. I am getting the same with GLAS. Why is the system so slow? With modern technology, why cannot the system be up and running, particularly when it comes to buildings? All they need is to be allowed to go ahead and build and then, of course, the farmer has to go out physically and build it. I wonder why are the payments from TAMS or GLAS under any of its headings so slow? Can the Department quicken the process, in particular, when a farmer is waiting to get a building in place to start up dairying in the following spring?
Mr. Aidan O'Driscoll:
This is an area where there is a lot of commentary at present. It is a fairly contested area. I will make a couple of points. Again, I do not want people to misinterpret this, but with these schemes we are way ahead of other member states. One of our neighbouring countries or regions has only launched its agri-environment scheme this year. We launched the new agri-environment scheme in 2015.
Second, of course, the great majority of people on GLAS have been paid - with 38,000 in the scheme and €105 million paid to 30,000 so far - but our systems do indicate that there are issues in respect of the outstanding claims. A total of 7,000 farmers have yet to be paid. Technically, it is an advance payment but, anyway, 7,000 of them have yet to be paid. In the last two weeks alone, €8 million was paid to 2,250 farmers. Therefore, we are whittling that figure down as rapidly as we can. In quite a few cases, we need material back from the farmer. To give an example I was given the other day, some farmers under GLAS are claiming a payment for low-emission slurry spreading, which is an important action in climate change emissions, air quality etc. In that group that has not been paid, 300 of them have been identified who have not submitted the necessary evidence. They have indicated they are claiming it but they have not submitted the necessary evidence. They have been contacted and asked to send in the form.
There are other issues. For example, again, to go back to these famous land parcels, if our system finds that there is something different between our record of land parcels and what the claimant has submitted, the matter has to be looked at. It has to be eyeballed, as we say. It might be when our staff look at the detail they think they find that it is okay, it is a small issue or they understand why the issue is arising. It might be that they have to go back to the farmer. What we are trying to do, and where I will put my hand up a bit, is better communications to the farmers as to what exactly the issue is, and we are trying to deal with that.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I was told that the Department's IT was not up and running. The Department's computer system last year was the cause of a lot of delays, that it did not have the proper IT system in place and that it has this rectified now. Is that true?
Mr. Aidan O'Driscoll:
No, I do not think it is, to be honest. By the way, for the 2015 payments which are referenced in the report, we did have to put a manual system in place for the final quarter of 2015. There is a system up and running and it is the IT system that is identifying that there are issues with some of the payments, but one cannot automate everything. There are some things a human being has to look at to see what is the issue. The computer will say there is something amiss but a person must engage with it, look at it and examine it. Some of the cases are quite complex. In many cases the farmer may need to send us something or something has changed and the computer has identified that and we need to be satisfied that the change is okay. It may be a slight change in the land parcel area or it might be, for example, that a partnership has been established since the GLAS plan was submitted, and that affects things, or they are flagged in the system. We have to work our way through those things. Many people have been paid and we are working through the remainder as fast as we can.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Okay, I will come back to the witnesses later.
Peter Burke (Longford-Westmeath, Fine Gael)
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Is the new computer system for GLAS up and running?
Peter Burke (Longford-Westmeath, Fine Gael)
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Is it fully operational?
Peter Burke (Longford-Westmeath, Fine Gael)
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I read before Christmas that only 52% of the budget was paid to farmers for the rural development programme. Are we ahead of that now or what is the position?
Peter Burke (Longford-Westmeath, Fine Gael)
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With respect, I am not asking about the EU. I am asking about the situation in this country.
Mr. Aidan O'Driscoll:
I know, but I am explaining that to date, we have drawn down 33% of the EU funding for the rural development programme. That is the EU fund drawdown. The total value of the rural development programme is €4 billion, including EU and non-EU. We believe, on our current projections, that we will have spent that in 2020 or thereabouts. One can go on spending for three years after 2020. We think we will have fully drawn it down by that date. The reason I draw attention to the EU drawdown is that it is the only comparison we can do and it is with our own previous performance and with other member states. We have the second highest drawdown in the entire EU at 33%. I think the Finns are at 36%. The average drawdown is 14%, but that is from memory.
Peter Burke (Longford-Westmeath, Fine Gael)
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I thank Mr. O'Driscoll. In terms of GLAS, when will outstanding payments to farmers be resolved? Do we have a target in terms of a date when we expect the majority to be paid?
Mr. Aidan O'Driscoll:
We are working through the payments as fast as we can. Inevitably, some of them will never be paid because it will emerge that they are not eligible for one reason or another. Within that cohort of 7,000 remaining, there must be a significant number who will not qualify for one reason or another.
Peter Burke (Longford-Westmeath, Fine Gael)
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Do we have the systems in place now to identify that?
Mr. Aidan O'Driscoll:
We have, yes. In trying to speed up the payments as best we can - we have priority teams working on it - we hope we will be able to identify groups of farmers who qualify for payment under some category or who clearly are not eligible. Basically, all of the functionality that we require to do that is in place in the IT system.
Peter Burke (Longford-Westmeath, Fine Gael)
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In relation to the payroll overpayments that were mentioned in the report, do we have confidence in the new payroll system that is being implemented throughout the public service? I note there have been 345 cases of overpayments. Less than one third have recovery plans in place. Are we confident that we are on top of the situation at the moment?
Mr. Aidan O'Driscoll:
Yes. It is difficult to say whether we are confident. There has definitely been a difficulty in the transition to the shared services system. The number of overpayments rose significantly in the transfer. I do not think that is a huge surprise. The new system is taking a while to bed down but there is an interdepartmental group working on it and there is a plan in place to tackle the overpayments. What has been done is that some of the overpayments have been allocated to the Department itself to be pursued. There are recoupment plans in place at the moment for €306,000. The total overpayment figure, as I understand it, for the end of 2016 is €508,000, but recoupment plans are in place for 97 cases totalling €306,000. The Department is pursuing 102 cases for a further €180,000 and PeoplePoint is pursuing 162 cases for €21,000. The answer to the question is, yes, plans are in place.
Peter Burke (Longford-Westmeath, Fine Gael)
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I thank Mr. O'Driscoll. It is very important that is resolved. I wish to focus in the remainder of my time on Bord na gCon, the Irish Greyhound Board. The Department currently gives it approximately €260,000 a week, which is a huge amount. Does Mr. O'Driscoll have confidence in the management, structure and governance of the board?
Peter Burke (Longford-Westmeath, Fine Gael)
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To be fair, I asked Mr. O'Driscoll a direct question. I understand the commercial side of the organisation and its relationship with the Department. As head of the Department, does Mr. O'Driscoll have confidence in the board?
Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. O'Driscoll also have confidence in the board's governance, practices and procedures?
Mr. Aidan O'Driscoll:
At the moment, a new greyhound Bill is under preparation. The Deputy will be aware that there have been a number of different reports on the sector over the years and a Bill is in preparation which will be brought forward very shortly. That will deal with issues relating to governance and so on. Obviously we are-----
Peter Burke (Longford-Westmeath, Fine Gael)
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Is Mr. O'Driscoll aware that Bord na gCon's latest annual report and accounts on its website are for 2014, two and a quarter years on, yet he is saying he has confidence in the organisation?
Peter Burke (Longford-Westmeath, Fine Gael)
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I think they appeared on the website for a short period but were taken down.
Peter Burke (Longford-Westmeath, Fine Gael)
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Why was that?
Peter Burke (Longford-Westmeath, Fine Gael)
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Is Mr. O'Driscoll aware of any issues regarding the accounts as to why they were taken down?
Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. O'Driscoll think it acceptable for a body which is getting more than a quarter of a million euro a week, in which he has expressed confidence, not to have its annual report or accounts on its website more than two years after the due date?
Peter Burke (Longford-Westmeath, Fine Gael)
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Does Mr. O'Driscoll think that is good enough?
Peter Burke (Longford-Westmeath, Fine Gael)
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Has Mr. O'Driscoll asked any questions about why that has happened, in the interests of transparency and for everybody in the industry?
Mr. Aidan O'Driscoll:
We have raised it with the board. If the accounts were late we would have asked why they were late. Deputy Burke will be aware that Bord na gCon has had a change of leadership recently but that would not have been a factor in this regard. Ultimately, it is a matter for the State body to meet the requirement. I agree with Deputy Burke that Bord na gCon should meet the requirement in a timely way.
Peter Burke (Longford-Westmeath, Fine Gael)
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One should bear in mind that we have increased the funding from 2014 to 2015 by approximately 25%. On the face of it, the governance procedures do not look very transparent. I will draw Mr. O'Driscoll's attention to the salary increases in the organisation. The amount of administration expenditure through salaries is incredible when one looks at the average employees in the accounts. One would imagine in such a sector there would be casual staff and others earning the minimum wage. Making a raw calculation, which I know is very crude, one is talking about average salaries of €47,000 and that has not changed much from 2014 to 2015. That indicates a number of individuals are on very significant salaries within that organisation which is not delivering.
Have we undertaken any review of the funding that we have given it and of its administration and salaries? Has the Department a handle on the matter?
Mr. Aidan O'Driscoll:
Few areas have been subject to more reviews. A series of reviews have been undertaken, including the Indecon report on greyhound racing. Leading up to the preparation of the greyhound racing Bill, which will be before the Oireachtas shortly, there were further reviews. It is an area that has been subject to significant scrutiny, including public scrutiny. People have different views.
I am not washing my hands of anything, but the board of Bord na gCon has core responsibility for Bord na gCon's operations and it would be improper of me to start micromanaging all of our State agencies. That would be to remove the responsibility that rightly rests with their boards and senior managements.
Peter Burke (Longford-Westmeath, Fine Gael)
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It is not good enough to say that. The figures are incredible. In 2007, Bord na gCon had a turnover of €63.5 million. That has decreased to less than €30 million, or a 56% reduction. Prize money has reduced significantly in the sector. Owners and breeders have been giving more than ever before. The State is increasing the amount of subvention to the sector, yet we do not seem to have a handle on the basic issue of wages. According to Bord na gCon's accounts, it had an average staff of 183 in 2014. That has increased dramatically. It is now suggesting that it sell off regional tracks. That has been mooted in the media. Harold's Cross has made a declaration and there is a board meeting on the matter this week. I understand that "Prime Time" is due to investigate this issue next week. Were I Mr. O'Driscoll, I would get my facts and figures correct. Will he assure me that the Department will conduct a detailed analysis of wages in the headquarters in Limerick? The increases seem colossal.
Mr. Aidan O'Driscoll:
I am aware that the interim CEO has been going through staffing in Bord na gCon and I would be happy to raise that matter with him and bring his attention to it.
Bord na gCon gets a significant subvention from the State. As the Deputy knows, we are locked into an 80:20 relationship between what we give to horse racing and what we give to dog racing through the Horse and Greyhound Racing Fund, which the Oireachtas considers regularly. My understanding is that the contribution from the State to Bord na gCon is approximately 30% of the latter's income, so it raises quite a bit itself. I also understand that, in recent years, it has been more successful in raising funds through its food and beverage offering and so on at race tracks. It took that operation back into the board.
Peter Burke (Longford-Westmeath, Fine Gael)
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As far as I can see, it wants to invest significantly in a stadium in Limerick, sell off other tracks to repay its debt and mismanage the industry. I do not understand where Mr. O'Driscoll is coming from when he says that it is improving in certain regards. The last accounts that we can get sight of are stark. It is incredible that we must go back to 2014 to get any handle on the performance of a governing body to which we are giving so much money. That is a disgrace. We need to get our act together. We should have been asking questions about this a long time ago. I understand that, when the Oireachtas was examining reports on this matter, Horse Racing Ireland and other sectoral bodies were invited to Leinster House, but many of the representatives of greyhound breeders and owners were not given that opportunity to air their views on the matter. They are the poor relation, yet we are providing the sector with significant moneys. We must pull up our socks.
Seán Fleming (Laois, Fianna Fail)
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Mr. O'Driscoll might explain to those present and who are watching whether there are ministerial appointees to the board. Presumably, there is a liaison officer between the Department and Bord na gCon who keeps in touch on daily matters, budgets and other activities. Apprise us of the practical arrangements.
Peter Burke (Longford-Westmeath, Fine Gael)
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Can we invite Bord na gCon to the committee?
Peter Burke (Longford-Westmeath, Fine Gael)
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Since it would be relevant, we should do that urgently. The body is getting so much State funding.
Seán Fleming (Laois, Fianna Fail)
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It has attended previously, but the Deputy is right. The Limerick stadium was the subject of detailed discussions during the previous Dáil. Will Mr. O'Driscoll explain his Department's practical contacts? It cannot just give Bord na gCon €14 million and let it go.
Seán Fleming (Laois, Fianna Fail)
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There must be some liaison. What is the process?
Mr. Aidan O'Driscoll:
The Chairman asked about appointments to the board. Nowadays, that is done through the Public Appointments Service, PAS, as the committee is aware. People express an interest in being appointed to specific boards. They go through the PAS, which draws up a short-list for ministerial decision.
We have a division that has oversight of State bodies in the horses and dogs sectors. It is headed by an assistant secretary - my colleague, Mr. Gleeson - who is currently dealing with the dog racing legislation.
We have a system of constant interaction. We do not leave Bord na gCon off. All that I meant to imply in my remarks was that we must be clear as to where responsibility lies. If a Department or Minister rushes in and takes responsibility away from an agency, it is comfortable for that agency. Agencies are given specific responsibilities and they must exercise them. They have chief executives and boards to oversee that work.
I will examine the salaries question.
Seán Fleming (Laois, Fianna Fail)
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We understand all of that. Directors have fiduciary duties.
Seán Fleming (Laois, Fianna Fail)
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Even if they are appointed by Ministers, their duties are to the board, not the Ministers. However, Mr. O'Driscoll is the Accounting Officer writing the cheque for €14 million per annum.
Seán Fleming (Laois, Fianna Fail)
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Mr. O'Driscoll has not explained the day-to-day or month-to-month relationship. Does the liaison officer, whoever it may be, meet Bord na gCon once per month, once per week or three times per year? What is the purpose of those meetings? What happens? We know about the board, but we are asking about departmental officials. The Department must have someone with a watching brief, seeing as how it is giving the organisation so much money. Explain what happens.
Seán Fleming (Laois, Fianna Fail)
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Specify. "Regular and frequent" means nothing to me. Is it daily, monthly, weekly or fortnightly? Where are the meetings held and who attends? How does the system work in practice?
Mr. Brendan Gleeson:
Bord na gCon has attended committee meetings previously. We explained at the time that there were oversight arrangements. Generally speaking, there are meetings once per quarter with Bord na gCon. There is engagement and discussion between the principal officer in charge of the division, staff in the division, the chief executive and his senior staff. For example, the Chairman asked about the board's composition. The Indecon report made recommendations on a variety of matters relating to governance. We talk through the implementation of the relevant provisions. One of the recommendations was that there should be veterinary, legal and financial expertise on the board. In determining the job specifications for recent board appointments, these have been included and people have been appointed with those-----
Alan Kelly (Tipperary, Labour)
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Might I clarify a matter?
Alan Kelly (Tipperary, Labour)
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Is Mr. Gleeson the person within the Department who has responsibility for this area?
Seán Fleming (Laois, Fianna Fail)
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How often does Mr. Gleeson meet people from Bord na gCon? He said once per quarter.
Seán Fleming (Laois, Fianna Fail)
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Has Mr. Gleeson a principal officer who meets the board?
Seán Fleming (Laois, Fianna Fail)
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How often do those meetings happen?
Seán Fleming (Laois, Fianna Fail)
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Where? How many from the Department attend?
Mr. Brendan Gleeson:
There could be two or three people from our Department. There would be the chief executive officer. They would usually meet in Limerick, but occasionally in Dublin. At the moment, our drafting of written framework agreements is well advanced, as per the new code of governance published last September, for all of our agencies and will be in place shortly.
Alan Kelly (Tipperary, Labour)
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Mr. Gleeson or Mr. O'Driscoll might want to address my questions. The latter stated that his Department had "core responsibility". That is the phrase that he used. At least, that is what I heard. We can check the record. If he did not, I can withdraw it. Maybe he did not, but that is what I heard. That is how it works because Mr. O'Driscoll is the Accounting Officer for Bord na gCon.
I am unsure as to how many people have confidence in Bord na gCon.
It is obvious that there will be a disclosure regarding Bord na gCon in the media in the near future. The dogs in the street - pardon the pun - know that the media have been all over this issue recently. I know this because I have received calls about it. I presume the fact that the accounts for 2015 are not up has set off alarm bells in the Department. That Mr. Gleeson only meets it once a year is alarming. That his Department currently only meets it once per quarter is alarming. At this stage the Department literally needs to be on top of it. I accept that the board has responsibilities and that the Department will not micro-manage an organisation, but the organisation receives an incredible amount of money and has many questions to answer. It is one which, to many, is making decisions on the future of the industry that are highly questionable. It is selling assets. One person has told me that it is proposing the sale of assets to cover for "questionable decision making," inefficiencies and high salaries for a core group. How can the Department stand over this? Does Mr. O'Driscoll agree that serious decisions such as the one taken recently on the sale of an asset should be suspended? As the overseer, the Department should suspend making such decisions until we find out what, in the name of God, is going on? The accounts for 2015 have not even published, yet the organisation is making decisions which will change the face of the industry. We do not know if these decisions are to cover up what has happened because we cannot even analyse the accounts for 2015.
Alan Kelly (Tipperary, Labour)
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The Department has them but we do not.
Alan Kelly (Tipperary, Labour)
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It is more than not satisfactory; it is not acceptable.
Alan Kelly (Tipperary, Labour)
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When will they be published?
Alan Kelly (Tipperary, Labour)
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I have been through this process. I was in the Cabinet. When will the Department bring them forward?
Alan Kelly (Tipperary, Labour)
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It would not be difficult to have something like this placed on it.
Mr. Aidan O'Driscoll:
I agree; we should be able to get it done within the next couple of weeks. I stress, however, that we do have the accounts which have been signed off on.
As I said, it is contested, but I stress that the board is exercising its responsibilities in a very difficult situation. There is a very high debt of over €20 million. Indecon produced a detailed report in which it made certain recommendations. Essentially, what the board is doing is working through some of the recommendations made in the report, including asset sales. As this is a responsibility of the board, I will not insert myself into it, but it is taking the decision it is taking because of a very high debt level and-----
Alan Kelly (Tipperary, Labour)
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I have to stop Mr. O'Driscoll because we only have a certain amount of time and he is not addressing the issue. When my colleague, Deputy Peter Burke, asked if Mr. O'Driscoll was aware of any issue regarding the accounts for 2015, I was not satisfied with his answer. I will, therefore, give him a second chance to answer it because I he prevaricated. Is he aware of any issue that needed to be dealt with in the run-up to the submission of the accounts?
Alan Kelly (Tipperary, Labour)
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Does anyone else want to respond? Does Mr. Gleeson want to respond? We have a job to do with the facts before us. We know that there are some historical issues that have to be dealt with and that there are issues that will be pulled out through the media. Does anyone in the delegation have any concern about the actions and behaviour of Bord na gCon senior executives regarding the accounts for the past few years? It is a broad question. If they are concerned about any issue at all, they should outline them now because, to be honest, this will probably end up being dealt with in another forum and I presume the committee will bring in witnesses from Bord na gCon at some stage.
Alan Kelly (Tipperary, Labour)
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I asked a specific question.
Alan Kelly (Tipperary, Labour)
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The question I have asked is incredibly broad and gives Mr. O'Driscoll as the Accounting Officer and Mr. Gleeson as the person with line command an opportunity to outline the position. I do not want them to be exhaustive. If they have issues, they have an opportunity to outline them here, even if they only want to outline one, two or three of them. I do not want to be in a position where I will have to say to the witnesses at some time in the future that they had an opportunity but did not use it. This is their opportunity to do so.
Alan Kelly (Tipperary, Labour)
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What are they?
Mr. Aidan O'Driscoll:
They are dealt with in the Morris report and the Indecon report and relate to how the industry is managed. They also relate to drug use in the industry and the financial management of stadiums and so on. We know the Limerick story which has been outlined before the Committee of Public Accounts. I point out that there have been changes. What the current board is doing, to the best of my knowledge, is working its way through these issues, as we are-----
Alan Kelly (Tipperary, Labour)
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Did the Harold's Cross stadium board sign off on the sale of the stadium?
Alan Kelly (Tipperary, Labour)
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I understand that, but I am a former Cabinet Minister and know what the situation is in the Department with regard to the Accounting Officer and the members of the management team dealing with all of the agencies under the Department. I can tell Mr. O'Driscoll straight that if I was the Minister, I would be having words with my Secretary General, assistant secretaries and principal officers if they did not know the answer to such a question. A decision was made to close and sell the Harold's Cross stadium. Did the board agree to this? It is a very simple question and it will be even more alarming for the committee if Mr. O'Driscoll does not know the answer to it.
Seán Fleming (Laois, Fianna Fail)
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The Oireachtas has made it standard practice since last summer that the letter of invitation to witnesses include the sentence that they have somebody who can make a call to their Department or offices because a meeting can go on for a couple of hours
Seán Fleming (Laois, Fianna Fail)
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That allows us to get information if it is not immediately to hand. We are often told that information will be sent to us. Mr. O'Driscoll is meant to have someone available here who could make a telephone call to have that question answered for us.
Alan Kelly (Tipperary, Labour)
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As there are eight or nine representatives present, can somebody step out and make a telephone call?
Alan Kelly (Tipperary, Labour)
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Will they do it now, please, and return with the answer?
Alan Kelly (Tipperary, Labour)
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It is extraordinary.
With regard to Bord na gCon, prize money dropped from €12.7 million to €7.8 million between 2007 and 2013. That is an example which shows where the industry is going. We all know the issues. It is obvious that I have huge concerns about the industry. I also have huge concerns about the breeding industry. Many people have spoken to me about the matter, as well as the prevalence of drugs, etc. in the industry. Is it being said here and now that the Department can still stand over the decisions being made by the organisation, given the volume of issues hanging over it?
Is Mr. O'Driscoll saying the Department is allowing these decisions to be made, which could have a big impact on the industry into the future? The 2015 accounts have not yet been done and there are many issues, not least the lack of confidence this causes. Can Mr. O'Driscoll, as Accounting Officer, stand over that?
Mr. Aidan O'Driscoll:
The Deputy's question is very broad. We will have the 2015 accounts very soon. Some of the decisions the board makes will inevitably come back to the Department and the Minister. The sale of an asset will ultimately require approval by the Minister and they cannot sell major assets willy-nilly so it will come to the Department.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did the board require permission to sell Harold's Cross?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does the Department have any concerns about it?
Alan Kelly (Tipperary, Labour)
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We are going to have to come back to this issue and the decision-making in respect of Harold's Cross needs to be looked at again. Bord na gCon made the decision but were the procedures of the Harold's Cross board adhered to? Did it make the decision beforehand? I ask Mr. O'Driscoll to look at this immediately and suspend any action until, as the Accounting Officer, he is satisfied that all procedures have been adhered to. If the board at Harold's Cross and the decision-making process have been bypassed, it says a lot about Bord na gCon.
My other favourite topic is CEDRA. The CEDRA report is very important and I am sure Mr. O'Driscoll is a big fan of the chair, Pat Spillane, who has been involved for years. CEDRA has done a huge amount of work but the Department pays lip service to it. I do not think it has much interest in anything that goes on outside the farm gate. Given the fact that the national planning framework is coming in, I encourage the Department to change in this regard.
Seán Fleming (Laois, Fianna Fail)
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For the benefit of people watching, can the Deputy explain what the CEDRA report is? He and I might know but some people will not.
Alan Kelly (Tipperary, Labour)
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CEDRA is the report on developing business in rural Ireland. How much funding has the Department put into CEDRA and how is it being used? Is this funding appropriate? How often has the interdepartmental group met recently?
Alan Kelly (Tipperary, Labour)
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I know that.
Alan Kelly (Tipperary, Labour)
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How many times has it met?
Mr. Aidan O'Driscoll:
That question would be better directed to the Department that leads on CEDRA. I do not have the figure in front of me. We make a number of different contributions to overall rural development. The agrifood sector makes a major contribution to rural development. We attend to things inside the farm gate and to the food industry, which is a hugely important part of overall rural development, and I would not play that down too much.
A small fund was set up for small community developments.
Alan Kelly (Tipperary, Labour)
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Social farming etc.
Alan Kelly (Tipperary, Labour)
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How much was it?
Alan Kelly (Tipperary, Labour)
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I am a former Minister whose Department was responsible for this, and I found the Department of Agriculture, Food and the Marine quite unwilling to progress it on the scale which was necessary. The Department needs to change its attitude to CEDRA and the whole Department needs to realign itself, given the challenges we face as a country, not just with Brexit but in repositioning our country from the point of view of planning. I encourage the Department to engage more in this and to try to work more closely with other Departments. The lack of engagement, funding and overall will from the Department in this area has been astounding.
I want to say a few positive things about farm safety, which is a real issue. I thank the Department for its initiatives in this regard and for the way in which it has co-operated in the programmes. Unfortunately, expenditure is lower than expected and progress is not happening. We are having more farm deaths than ever before and I ask the Department to redouble its efforts in this area. I ask Mr. O'Driscoll to work with the line Minister to find more funding and look at other measures to help. A chap from Galway was caught in a PTO shaft and lost his leg. He goes around to schools, takes his prosthetic leg off and puts in on a table to shock the agriscience students in the class. He is accompanied by a man whose own brother, someone I knew well, died. We need to redouble our efforts on the schools programme because that is where we affect people. Younger people have a bigger impact on older people and we need to start on the ground, which is inside schools. As this chap cannot go around all the time explaining how he lost his leg, we need more funding for this.
My next point relates to the intergenerational nature of farming. We need to get involved in mobile devices and apps. Farming is seasonal and the safety mechanisms which work in autumn do not necessarily work in summer. I encourage the Department to look at programmes to address this and I will write with some ideas. Testimonials on public media, TV and radio are very important and the Department should redouble its efforts to put forward more funding in this area. People across politics would support the Department in this regard. It is unfortunate that expenditure is lower than anticipated. I know the Department can only put forward programmes and cannot do everything itself but we would all be appreciative if a specific unit was set up to push it forward.
Catherine Connolly (Galway West, Independent)
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It is fascinating to see the witnesses and good to be able to hold them to account. The report on the CEDRA rural development fund and I note it is stated that approved works were not fully completed within the timeframe.
What was the difficulty with that, given its importance? Was that in the series of questions put by Deputy Kelly?
Seán Fleming (Laois, Fianna Fail)
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He opened up that topic.
Catherine Connolly (Galway West, Independent)
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I am.
Catherine Connolly (Galway West, Independent)
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I would like an answer or a longer note to explain why there was an underspend on that.
Catherine Connolly (Galway West, Independent)
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It is our perception on the ground when there is an underspend that somebody is failing to draw down the money. For example, there was money available for an urban horse scheme which I will come back to. There is a perception that there are very good schemes and lots of money but it is not drawn down.
Mr. Aidan O'Driscoll:
The term underspend very often means only that the spend falls into the following year, not that the project does not in fact proceed. The social nature of the CEDRA projects makes them fairly complex and we would not expect everything to be done absolutely spot on within a calendar year. It is not the case that projects remain unfunded. That generally would not be the case.
Catherine Connolly (Galway West, Independent)
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On that topic, I know the Traveller community was particularly interested in the urban horse programme but the funding has not been used up as I understand from reading the documents. What is the problem?
Catherine Connolly (Galway West, Independent)
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I am thinking of Galway and rural areas.
Mr. Aidan O'Driscoll:
In the case of the Traveller horses, the projects develop more in urban areas. The issue is that we have funding but we do not operate it on the ground. Local authorities operate it on the ground. The local authority needs to have a project and come to us. We can decide whether to fund it and, within limits, we have funding available, but it is then for the local authority to deliver.
Catherine Connolly (Galway West, Independent)
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The funding and goodwill are there and I should direct my attention to the local authorities or the implementation bodies.
Catherine Connolly (Galway West, Independent)
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The Department introduced the farm safety scheme in October 2014. Accidents generally have gone down but farm accidents have gone up. There were 21 reported in 2016 compared with 18 in 2015.
Mr. Aidan O'Driscoll:
Yes. That was a very small scheme at the end of the old rural development programme. It is important to acknowledge that within the targeted agricultural modernisation, TAM, scheme one of the major investment areas is animal handling facilities for farm safety purposes. In addition, in our knowledge transfer groups that we are rolling out, farm safety is a major feature of discussion. This is a cultural issue. We do put money into handling facilities and so on but that is not the core of the problem. The core is behaviour, and the knowledge transfer groups may play a significant role in that. We are embedding farm safety into their work.
Catherine Connolly (Galway West, Independent)
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Is it being embedded in grants, as a condition for grants?
Mr. Aidan O'Driscoll:
In the sense that the person has to complete the knowledge transfer course. It could be thought of as a training course. As an integrated part of that and to get the payment, the person must complete certain training in farm safety. We are hoping that will have a bigger effect ultimately.
I agree completely with what is being said. This is a major challenge for the entire sector and we need a joined-up response with voluntary groups and others. The Embrace Farm organisation has done tremendous work, for example, in heightening awareness of this issue through various activities, especially through its very moving annual event which includes a service where, among other things, the names of people are read out. It gets a lot of publicity and Embrace leverages that publicity to try to encourage a change in behaviour.
Catherine Connolly (Galway West, Independent)
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Despite the Department's best efforts the death rate has gone up.
Catherine Connolly (Galway West, Independent)
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What are the Department's specific actions for the coming year? What are its targets? What is its focus?
Mr. Aidan O'Driscoll:
The big focus is the knowledge transfer groups. They are only beginning to kick off and we would not expect to see their impact yet. As part of the TAMS farm investment grants, a half day of safety training is required before we pay unless the person already has a green certificate which would include farm training. Those two areas are the big things we are doing. It does not appear separately as a farm safety item but they are integrated into two of our biggest and most important measures.
Catherine Connolly (Galway West, Independent)
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Does Mr. O'Driscoll expect the deaths will be fewer next year as a result of the Department's efforts and programme?
Catherine Connolly (Galway West, Independent)
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Obviously it is a very difficult area but is Mr. O'Driscoll satisfied with the review and that the Department is taking different steps now in order that this time next year he can say it made a difference as a result of what was learned?
Mr. Aidan O'Driscoll:
We hope that these will have a real impact and reduce farm deaths. Being realistic, there are very few farms where these incidents happen. Getting at those few and predicting where they will be in the future is tricky. While this is an issue for the Department, it is also for a wider group and for the community. That is why I point to groups such as Embrace which can have a significant effect.
Catherine Connolly (Galway West, Independent)
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There seems to be a low take-up on forestry. There is money available but it also has been underspent. Will Mr. O'Driscoll expand on that?
Mr. Aidan O'Driscoll:
The forestry planting over recent years has been a fairly steady 6,500 to 7,000 ha per year. There has been funding over these years for somewhat more than that but nevertheless that is what we get in. There have been controversies in some areas about forestry but we are making significant advances. Approximately 11% to 12% of the national land area is under forest. We are aiming to get to 17%.
Catherine Connolly (Galway West, Independent)
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Within what space of time?
Catherine Connolly (Galway West, Independent)
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There is a figure for rented buildings. Does the Department have many rented buildings or what is its policy on renting buildings?
Mr. Aidan O'Driscoll:
We have many rented buildings and several that are rented for us by the Office of Public Works, OPW. We are trying to consolidate as much as possible. There are rented buildings in Portlaoise. The Chairman would be familiar with that and some we have left. We are trying to concentrate our staff in Portlaoise and hope in that way to reduce rents. There has been some reduction in several areas.
Catherine Connolly (Galway West, Independent)
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What is the figure for renting?
Catherine Connolly (Galway West, Independent)
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Does the Department also own property?
Catherine Connolly (Galway West, Independent)
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Is there a policy on not renting and acquiring property?
Mr. Aidan O'Driscoll:
Many of the buildings we are in we have been in for some time. We rented the buildings in Portlaoise at the time of the decentralisation decision. The intention at that time was to build an entirely new building for the Department. That did not materialise for reasons that are well known, connected with decentralisation. We share a Government building but because of the number of staff we had down there, several other buildings had to be rented for us.
I have been regularly engaged with the OPW. I do not like our staff being scattered across a number of buildings. I would like them all to be in the Government building, but that would require building an extension on it, which I still hope will happen.
I have been given a figure for rental of premises. The outturn for 2015 was €882,433. The outturn for 2016 was €536,168 so it is on the way down.
Seán Fleming (Laois, Fianna Fail)
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How much of that would be in Portlaoise?
Catherine Connolly (Galway West, Independent)
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Many bodies come before us, and the same problems of procurement and overpayments keep arising or being highlighted by the Comptroller and Auditor General. Then there are the legal costs and legal claims. I wish to consider these three matters.
Catherine Connolly (Galway West, Independent)
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It refers to 34 contracts, I think.
Mr. Aidan O'Driscoll:
Yes. It refers to a number of contracts which did not go out to tender, essentially. On procurement we spent €92 million in total on 2,300 unique vendors, but what the Comptroller and Auditor General was calling attention to was 34 contracts amounting to €1.7 billion where-----
Catherine Connolly (Galway West, Independent)
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They were undertaken without a competitive process.
Mr. Aidan O'Driscoll:
Yes, exactly, and these relate to two broad areas. I can go through them in detail. One is a group of areas where we are now putting together a request for tenders and competitive processes that were difficult to do in the past. However, with the Office of Government Procurement now available, we are doing that. Another relates to hiring veterinary staff in emergency situations. It is a little tricky, but we are trying now to put that into a tender arrangement. There are a number of other ones where I think it is inevitable that there will be very short-term, urgent needs and where tenders are not possible. For example, removing animals at short notice and the need to get-----
Catherine Connolly (Galway West, Independent)
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I understand that but of the 34 that were identified, looking back now, how many were not emergencies?
Catherine Connolly (Galway West, Independent)
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This time next year, 30% of the €1.7 billion-----
Catherine Connolly (Galway West, Independent)
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What is the nature of the outstanding - or I think the word used was "contingent" - liability? There was the suspected irregularity as well. There was an investigation into that. Those were the two final matters apart from Brexit.
Catherine Connolly (Galway West, Independent)
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Yes.
Catherine Connolly (Galway West, Independent)
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I am referring to both: the legal costs and compensation and the breakdown, and then there is the contingent liability. I ask Mr. O'Driscoll to comment on these. If we look at the claims by the public, we see there were only 14, yet the legal costs were astronomical by comparison. If we look at the claims by employees, we see there were 183 and the legal costs were less.
Catherine Connolly (Galway West, Independent)
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No. I am referring to the claims by members of the public. The number of cases was 14 and the associated legal costs were €317,000. Above the-----
Mr. Aidan O'Driscoll:
This is the payment that would be made, I think, to those members of the public and the legal costs arising therefrom. In the case of claims by employees, expenses were incurred as a result of a court case taken against us in the High Court, which was successful. It related to a strike and to paying employees for the period of the strike. The total amount of €773,000-----
Catherine Connolly (Galway West, Independent)
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Was it not €793,000?
Catherine Connolly (Galway West, Independent)
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Of that figure. The figure for claims by the public is €134,000. Does Mr. O'Driscoll see in the report that the legal costs in respect of these claims were phenomenal? If one looks at the claims by employees under the Vote, one sees that the legal costs for the Department are €92,000 for 183 cases. Then if one looks further, one sees €317,000 for 14 cases taken by members of the public.
Mr. Aidan O'Driscoll:
The explanation for that is probably very clear. The largest element of the figure for employees was one single court case which would have involved most of the employees. The claims by the members of the public are almost certainly all individual claims and, therefore, probably 14 individual cases.
Catherine Connolly (Galway West, Independent)
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What about the contingent liability?
Mr. Aidan O'Driscoll:
As I said, we are unfortunately from time to time involved in many legal cases and we must keep an element of the Vote to cover liabilities that may arise for legal cases. Obviously, one cannot predict in advance the cost that will arise, so we estimate it as best we can and account for it in our Vote.
Catherine Connolly (Galway West, Independent)
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My final question concerned the suspected irregularity. How long has the investigation been ongoing? What is the updated position?
Catherine Connolly (Galway West, Independent)
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This is on paragraph 6.9.
Catherine Connolly (Galway West, Independent)
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I see that. My question is how long the investigation has been ongoing. What is the up-to-date position? What has been learned from it?
Catherine Connolly (Galway West, Independent)
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If Mr. O'Driscoll does not know, perhaps he could come back to us with the relevant facts: how long the investigation has been ongoing, the completion date and what has been learned from it?
Catherine Connolly (Galway West, Independent)
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Absolutely.
Catherine Connolly (Galway West, Independent)
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That is fine. I have no difficulty with Mr. O'Driscoll coming back to me. I am just seeking the facts: how long the investigation has been ongoing, when it will be completed, what the Department has learned from it and what has happened?
My final point concerns Brexit, which Deputy Aylward started off with. Either now or whenever the Chair allows him in, perhaps Mr. O'Driscoll might come back to me on this. He said he might come back on his planning for the worst case scenario and best case scenario.
Seán Fleming (Laois, Fianna Fail)
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We will come back to that in a moment. I wish to ask a few questions. I think Deputy Aylward may also have some final questions.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What about Mr. Gleeson? Did he get a reply about Bord na gCon?
Seán Fleming (Laois, Fianna Fail)
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We will come back to that in a moment. I want to make one or two other points. I notice in the Department's report, under land mobility measures such as the early retirement and installation aid payment schemes, that the Department paid out €10 million in 2014 on the early retirement scheme. This decreased to €7 million in 2015. Obviously, some of the people availing of the scheme are getting the State pension and, consequently, the payment from Mr. O'Driscoll's Department decreases if they clock into that. I wish to link and relate this to a fact sheet Mr. O'Driscoll sent us on Irish agriculture for January 2017 which refers to farm structure data in Ireland. The fact sheet refers to 139,000 farm holdings and an average farm size of 32.5 ha. It details the proportion of family farms held by age and shows that 6% of farms are held by people under 35 years of age.
It states 53% are held by people over 55 years of age. Therefore, 41% of farms are held by people in the 35 to 55 years age group. Will Mr. O'Driscoll drill down into those figures and send us information relating to the total farmed land in the country for that age group? I am seeking data not by the number of farms but by farmed land.
The figures could mask the situation. While there may be a high percentage of farm owners who are elderly, this might not correspond to the amount of farmed land held by elderly people. Many older farmers have land below the average farm size. It would be useful for us. The figures would be preferable to those for farm holdings, because they do not tell us how much of the farming land in the country is held by the various age cohorts. I do not expect that Mr. O'Driscoll would have the figures here and now.
Seán Fleming (Laois, Fianna Fail)
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Does Mr. O'Driscoll have that type of information?
Mr. Aidan O'Driscoll:
It is possible that we would have to drill into our own systems to provide it. The national farm survey would have survey evidence on this. We could provide that to the committee. Certainly, I will provide the information to the committee.
This is a persistent problem in Ireland and throughout the EU. Several countries have good age structures relating to the farming population. However, by and large, they have got there through radical means. For example, a farmer may not be eligible for the old age pension unless he retires. That is the situation in Germany, for example, so Germany does not have this problem. We have put in place several systems to encourage leasing.
Seán Fleming (Laois, Fianna Fail)
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We do have it for the non-contributory pension. If a person has assets, he will not get it. However, if he has contributions, he need not divest. We had that system before.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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A means test applies.
Seán Fleming (Laois, Fianna Fail)
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It would be interesting from a planning point of view. The numbers of farmers who are over 55 years does not tell us anything about the quantum of farming or how many are farming land. A far more relevant measure is the amount of farm land being farmed in the country that is held by people in the various age categories, rather than the number of farmers. Does Mr. O'Driscoll understand my point?
Seán Fleming (Laois, Fianna Fail)
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Will Mr. O'Driscoll see what he can send us?
Seán Fleming (Laois, Fianna Fail)
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Let us come back to the issue of Bord na gCon. Will Mr. Gleeson give us an update?
Mr. Brendan Gleeson:
I am afraid I have been unable to find the answer to the specific question. I will come back later today, if I can. The specific question related to whether the board of Harold's Cross racetrack had signed off on its sale or closure. I have been unable to find the answer to that specific question.
Seán Fleming (Laois, Fianna Fail)
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That is fair enough. In meetings between departmental officials and Bord na gCon would this have been flagged to the Department? Does Mr. Gleeson understand my question? Was the Department aware that this was pending, even if the board of the track in Harold's Cross was not aware that it was pending?
Seán Fleming (Laois, Fianna Fail)
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Of course. The matter was contentious.
Mr. Brendan Gleeson:
Bord na gCon is in a difficult financial situation. That has already been alluded to. Since 2007 and through the recession, the board's financial position worsened. This was exacerbated by a large debt. We had a long session relating to the Comptroller and Auditor General's report on Limerick previously. The fact is the board is in a difficult financial situation. We commissioned an Indecon report to examine various things, including governance, financial issues and issues of regulation. We are trying to deal with those bit by bit.
One of the recommendations in the report was that Bord na gCon had to reduce its debt levels and improve its financial situation. To achieve that, the recommendation was that the board would sell assets. While the report was not prescriptive about what should be sold, Harold's Cross was one of the assets named.
Since 2014, we have known of a recommendation that the track at Harold's Cross would be sold. Part of the reason is that the asset is likely to have significant value. Second, it is only 4 km from another flagship stadium. If we were starting from scratch, we would not plan things that way. That is the position.
The board has been wrestling with this for some time. It is obviously an emotive issue and has attracted strong feelings on various sides. The decision on whether to run a track is a matter for the board. The decision on the sale is a matter for the board. However, the sale has to be consented to by the Minister for Agriculture, Food and the Marine and the Minister for Public Expenditure and Reform. That is the position. At the moment the board has made a decision to close the track and sell it. I do not know whether the local board was consulted. I will come back to the committee on that.
Seán Fleming (Laois, Fianna Fail)
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Mr. Gleeson can send us a note on that. I wish to make one last point before I call Deputy Burke. Obviously, there is an issue with the 2015 audited accounts and they are nearly here. Far more important is the question of the 2016 management accounts. Getting the 2015 accounts alone will not be much good.
The Estimates for this year are going through the Dáil at the moment. Before the Department agrees to hand out a further €14 million, it will have to examine up-to-date 2016 financial figures. These figures may not be audited but the management accounts should be close enough to the final accounts. We will ask Mr. O'Driscoll not only to give us a copy of the 2015 figures but to give us an up-to-date financial report, notwithstanding the fact they are not audited. That is the information on which decisions are being made at the moment. I am referring to the 2016 outcome.
Peter Burke (Longford-Westmeath, Fine Gael)
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It is incredible that we cannot get an answer to that question. A total of eight or nine people from the Department are present. We are giving an agency €260,000 per week. We have been here for a long period but we have been unable to get an answer to a simple question. That is absolutely incredible.
My information is that the board has not approved this. Those involved are looking to bring the board down the country to approve it. That is a Dublin board. That is my information.
It is incredible that we cannot get that simple information. It is all well and good to talk about selling tracks but we have to ensure the industry is sustainable. It is not good enough simply to embark on wiping off debt by cutting the industry to the bone. We are talking about regional tracks as well. This has been well cited in the media. We are talking about regional Ireland and regional tracks. These mean a great deal to the local economies. The integrity of greyhound racing is at stake. No decision should be made until we are able to bring Bord na gCon before the committee to explain this behaviour. We need to drill down into this. These are big assets. They mean a great deal to people and local economies. We should ensure this decision is put on hold until we can ask the right questions.
Seán Fleming (Laois, Fianna Fail)
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I understand what the Deputy is saying. The Joint Committee on Agriculture, Food and the Marine is the policy committee on this area. That committee might take the view that it is more under its remit, since it is a matter of current policy, rather than a matter for the Committee of Public Accounts. At issue is a decision for the future. Perhaps we should convey our views to the Joint Committee on Agriculture, Food and the Marine.
Peter Burke (Longford-Westmeath, Fine Gael)
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It has major financial implications and it could be the wrong decision.
Seán Fleming (Laois, Fianna Fail)
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That is fine. The point is well made. I will call Deputy Cullinane next.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Deputy Cullinane did not go first time.
David Cullinane (Waterford, Sinn Fein)
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I wish to offer my apologies to the witnesses for having to leave earlier. I was hosting a briefing on a Bill and I was unable to be in two places at the one time. I have several questions but if they have been answered already, the Chair can inform me. I missed an hour of the meeting.
Page 92 of the Comptroller and Auditor General's report refers to how the EU abolished milk quotas in April 2015. The policy is influenced by growing demand for dairy products on the world market. Did the Department undertake any analysis of an increase in demand in anticipation of the abolition of milk quotas? What level of research was done by the Department?
David Cullinane (Waterford, Sinn Fein)
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That does not relate to production but rather demand.
Seán Fleming (Laois, Fianna Fail)
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It related to production in Ireland and demand worldwide.
David Cullinane (Waterford, Sinn Fein)
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What level of research was done on the potential increase in demand?
Mr. Aidan O'Driscoll:
This comes back to Food Harvest 2020. We are projecting that it would be good to bring about a 50% increase in production to meet growing global demand. Broadly speaking, global demand for dairy products is growing at between 2% and 3% per year. Ireland is aiming to take an increasing share of that global market, albeit the share would still be rather small.
When, with our support, the Food Harvest committee stated production would increase by 50% by 2020, a lot of people doubted it, but it has already increased by approximately 30% from the Food Harvest base figure. Therefore, we are on track towards meeting the figure of 50% or perhaps more.
David Cullinane (Waterford, Sinn Fein)
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What about milk prices in that period? Since the abolition of milk quotas, have prices gone up or down?
David Cullinane (Waterford, Sinn Fein)
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Why was that?
Mr. Aidan O'Driscoll:
It happened for a number of reasons, but essentially the reason was there was an increasing supply in all of the major production regions of the world combined with a contraction in demand that was partly due to the global recession and partly due to the fact that China had overstocked with dairy products. Of course, when it moves on world markets, it has a completely-----
David Cullinane (Waterford, Sinn Fein)
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When the Department was forecasting an increase in demand and setting a target of a 50% increase in production, was it anticipated that there would be a sharp decline in milk prices, as it worked out?
Mr. Aidan O'Driscoll:
No one anticipated such a sharp decline. The decline in milk prices was sharper and of longer duration than anyone anywhere in the industry had expected. To be clear, when we speak about the Department setting the 50% target, it was set by the Food Harvest committee which is representative of people throughout the industry, with the support of the Department.
David Cullinane (Waterford, Sinn Fein)
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Obviously, we have to look at contingencies. Therefore, there is a policy in place to increase production on the basis of increased demand. The hope would have been that prices would stabilise and certainly not decrease, but, as Mr. O'Driscoll stated, they decreased fairly rapidly. What contingency plans did the Department have in place if production was to be increased and, even with an increase in demand, there was to be that volatility in prices?
David Cullinane (Waterford, Sinn Fein)
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I understand that, but I am asking what contingency plans were put in place by the Department to protect farmers?
Mr. Aidan O'Driscoll:
At the depth of the crisis, we put a good deal of pressure on the Commission to open up what we thought we would never see again - the intervention buying-in of dairy products. That was done, I think successfully. It had the effect of putting a floor under the market, which was very useful. Second, we provided co-funding. We provided payments for farmers from money provided by the European Union and national funds. We provided payments of, I think, €1,360 per dairy farmer, with an €800 top-up for young farmers, on the back of moves at EU level, combined with national funding. The answer to the question is that we took action in terms of the markets, which action is always taken in co-operation with our EU partners as the market is managed at EU level. We made payments directly available to dairy farmers to support them during that difficult time. As the Deputy knows, prices have since recovered substantially and are now averaging 35 cent per litre.
David Cullinane (Waterford, Sinn Fein)
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For clarification purposes, milk quotas were abolished in April 2015. Is that correct? Then there was a levy of €71 million in 2015.
David Cullinane (Waterford, Sinn Fein)
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Was the levy payable for the first three months only?
Mr. Aidan O'Driscoll:
No. It was in place for the year. The milk processing year runs to the end of March. It was for the year to the end of March 2015, the last period for milk quotas, during which we went over quota as our farmers essentially geared up for the ending of quotas. We fought very hard, with a number of other member states, to have the regime to be changed in order that penalties would not be imposed for that year. We lost that battle, but we did secure the arrangement referred to in the Comptroller and Auditor General's report, as part of which the superlevy was to be paid in instalments.
David Cullinane (Waterford, Sinn Fein)
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I thank Mr. O'Driscoll. I will turn to the beef data and genomics programme, BDGP, which I understand runs from 2015 to 2020. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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Financial support is provided under it for suckler beef farmers on the basis of improving the genetic merit. Is that correct?
David Cullinane (Waterford, Sinn Fein)
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Is it still the case that once a farmer enters the scheme, he or she will remain in it for six years?
David Cullinane (Waterford, Sinn Fein)
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Will Mr. O'Driscoll give me the figures for how much was allocated and spent in 2015, 2016 and to date in 2017? Second, if possible, what was the number of farmers registered for the scheme in each of those years?
David Cullinane (Waterford, Sinn Fein)
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For 2015, 2016 and this year to date. For 2015 and 2016, what was the amount allocated and the amount spent?
David Cullinane (Waterford, Sinn Fein)
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As there are many officials present, I assume someone has them.
David Cullinane (Waterford, Sinn Fein)
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For which year?
David Cullinane (Waterford, Sinn Fein)
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How much was spent?
Mr. Aidan O'Driscoll:
A sum of €34.692 million. In 2016, €61 million was spent. Obviously, as 2015 was the first year of the scheme, it was only kicking in and getting into gear. Overall, we had 29,000 applicants to participate in the BDGP, of whom 24,000 carried through to payment. Obviously, there is a dropout rate in a very demanding scheme such as this.
David Cullinane (Waterford, Sinn Fein)
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How many are currently registered for the scheme?
David Cullinane (Waterford, Sinn Fein)
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How many farmers participate in the suckler cow scheme?
David Cullinane (Waterford, Sinn Fein)
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Yes.
David Cullinane (Waterford, Sinn Fein)
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Is there a reason for the difference of 8,000? Why are fewer farmers participating in the BDGP?
Mr. Aidan O'Driscoll:
The conditions attached to the BDGP are more demanding for farmers. The purpose of the BDGP is to make a significant improvement in the level of efficiency on farms and also to impact significantly on climate change emissions from farming, an important objective for the future. The previous beef welfare scheme was different with different conditions. One would not necessarily have expected the same level of participation.
David Cullinane (Waterford, Sinn Fein)
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I thank Mr. O'Driscoll. I have one final question. As the chief Accounting Officer, is Mr. O'Driscoll responsible for the valuations of properties?
David Cullinane (Waterford, Sinn Fein)
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As the chief Accounting Officer, is it Mr. O'Driscoll's responsibility to ensure up-to-date valuations are available?
David Cullinane (Waterford, Sinn Fein)
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I am not asking what Mr. O'Driscoll is trying to do but whether it is his responsibility to make sure they are obtained.
David Cullinane (Waterford, Sinn Fein)
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It is. I am looking at page 2 of the report which refers to "Capital Assets". It states:
A schedule of all land and buildings administered by the Department is appended to the account. However, as valuations for all of these properties are not available, they are not included in the statement of capital assets.
First, why are they not available? Second, why are there no up-to-date valuations of the properties?
Mr. Aidan O'Driscoll:
We have tried to prioritise valuations of properties. As I mentioned, we were requested, following the previous discussion at the Committee of Public Accounts, to undertake valuations of our fishery harbour properties, which are very valuable. I think they were valued eventually at more than €600 million. That has been done, but it would be difficult to do everything at once. If there are outstanding valuations, I am sure we are working through them.
David Cullinane (Waterford, Sinn Fein)
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I thank Mr. O'Driscoll.
Seán Fleming (Laois, Fianna Fail)
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Mr. O'Driscoll mentioned harbours. We dealt with correspondence at a meeting earlier today about the issue in Howth which has come up previously. I am sure Mr. O'Driscoll is more aware of the background, but it has been suggested to us that applicants must submit a bank draft with their proposal in the amount they consider to be the appropriate amount of rent to secure the lease of a property. Is that correct?
Mr. Aidan O'Driscoll:
Yes, there is a requirement to make an upfront payment.
I know our system for tendering at the harbours has been examined externally and found to be proper. As the committee knows from previous hearings and the last hearing that I was at, we were under some pressure to ensure that properties are properly leased out at all of our harbours. We are working through that. Much progress has been made on that, I feel, including at Howth.
Seán Fleming (Laois, Fianna Fail)
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Does the Department have many vacant properties at the six or seven harbours?
Mr. Aidan O'Driscoll:
Many of the properties that people think are vacant are not. They are subject to lease or to licence. People use them for some sort of public purpose or for storage and so on. There is a relatively small number of properties that are available. I believe there is only one property available at the moment that is suitable for lease which is not yet leased out. We are going to put it out for tender.
Seán Fleming (Laois, Fianna Fail)
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Which harbour is that at?
Seán Fleming (Laois, Fianna Fail)
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I ask the Secretary General to explain how somebody inquires about leasing a property, has to submit a banker's order with the application and says how much he or she is going to pay.
Seán Fleming (Laois, Fianna Fail)
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Is it part of the tender process that someone submits proof of ability to pay?
Seán Fleming (Laois, Fianna Fail)
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I ask Mr. O'Driscoll to explain the difference between lease and licence.
Mr. Aidan O'Driscoll:
Some of the properties have been under licence for a long time, mainly to public bodies. Essentially, they come to the same thing. They are long-term formal arrangements. One of the difficulties we have had, which has been aired previously at this committee, is that some of the properties have been rented out for a long period but without formal lease. This is something that we are trying to rectify. We are gradually working our way through that.
Seán Fleming (Laois, Fianna Fail)
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Will the Department have to compensate people if it wants them to vacate or will they get squatters' rights?
Seán Fleming (Laois, Fianna Fail)
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Okay. I call Deputy Aylward.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have a few quick questions. I want to ask about the young farmers and the national reserve. There was provision of €24 million in 2015 for young farmers from the national reserve. There was no funding in 2016. Can the witness explain why that happened? What is the Department thinking about in the future?
Mr. Aidan O'Driscoll:
The national reserve is funded by a number of different mechanisms. The automatic one is from a claw-back on sale of entitlements without land and from unused entitlements. Typically, very little comes into the national reserve from those sources. It can be that there is then not enough money in the reserve-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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There was €24 million in it in 2015.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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So all farmers would see it reduced a bit.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What is the policy going forward to 2017 and 2018?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I want to ask about the forgotten farmers, as they are known. I have been lobbied by several people who are not in the system at all who got into farming late and did not qualify because of age and had not the qualifications in respect of land at the time. They are always trying to make the case that they are forgotten about. They call themselves the forgotten farmers. Is there anything in the pipeline for them? I have raised this with the Minister on several occasions. Is there anything in the pipeline for those forgotten farmers, as they call themselves?
Mr. Aidan O'Driscoll:
They are a particular group. I agree that we have all heard from them. They are an ill-defined group but, nevertheless, our best estimate of the number of farmers that might fall into this category is about 3,900. If we were to make provision in the national reserve for all of those farmers, it would cost about €12 million. The difficulty with that is the way in which the national reserve is set up by the EU. Preference must be given first of all to young farmers and new entrants. If we wanted to deal with the forgotten farmers, we would then have to find another €12 million on top of what is spent. That would mean a further cut to everybody's payments. I realise that this group of farmers feels hard done by, but it does fall outside the conditions of the various schemes, which relate to age and the number of years that one is in control of one's farm.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is basically the same answer. Money would have to be taken out of the existing payments. Is that the way this would be looked at?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I want to ask about the farmer retirement scheme that was in place. To me, it was one of the best schemes to entice older farmers to hand over their farms to their children and so on. Could it be looked at again in the future? I know it comes down to funding but it was a very good scheme and it was taken up and used. It brought a lot of young farmers into the system. Could it be looked at again or is cost-preventative?
Mr. Aidan O'Driscoll:
It is not in the current rural development programme. I cannot answer as to whether it will be in a future programme. That will be for post-2020 and I really cannot answer at this stage. For a start, we do not know what the shape of the rural development regulation itself will be, as it might change by then. That scheme was successful in encouraging some farmers to move to early retirement. However, it was often criticised - I think with some justification - that it addressed early retirement rather than retirement. The figures read out by the Chairman relate to farmers over 65 and so on. The early retirement scheme did not really address that. It actually encouraged people to go early.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is right.
Seán Fleming (Laois, Fianna Fail)
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That is about farm safety and old men out on their own on farms in a tractor or working machines with no one with them.
Seán Fleming (Laois, Fianna Fail)
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Sorry for cutting across.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I have two more questions. I want to ask about the credit balance. The appropriation account document for 2015 gives details of €3.828 million in 2015 and nil in 2014 in respect of the beef data and genomics scheme. What does it mean by nil in 2014? It is on page 12. What is that about?
Seán Fleming (Laois, Fianna Fail)
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What page are we on?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Page 12 under other credit balances. Paragraph 2.6.
Seán Fleming (Laois, Fianna Fail)
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There is a nil there. The scheme was not there. It was-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why is there a nil?
Seán Fleming (Laois, Fianna Fail)
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It had not started. There was no balance in 2014 because scheme was not-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Where did that money go or where was it allocated afterwards?
Seán Fleming (Laois, Fianna Fail)
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To 2015.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did it just carry into 2015? I am just wondering where that figure for the genomics scheme went. That is why I am asking about it.
Seán Fleming (Laois, Fianna Fail)
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It was new funding in 2015. It was not there in 2014.
Seán Fleming (Laois, Fianna Fail)
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It is was a new scheme in 2015.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why is it down in 2014 as nil?
Seán Fleming (Laois, Fianna Fail)
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Because the scheme did not exist. There was nothing in the account in 2014. There was money in the credit balance-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Why print it out at all then? Why show it at all?
Seán Fleming (Laois, Fianna Fail)
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Because it shows the 2015 figure on the left-hand side of the page and it is just a comparison to show what it was for the previous year. There was nothing in that scheme for that year.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Okay. I wish to comment on the beef data and genomics scheme, which I am in myself. I have raised this with the Minister and have spoken to the Department about it previously. We all tag calves at birth. I am talking about particular females for the genomics scheme. One uses one ear for a bovine viral diarrhoea, BVD, tag and one takes a sample. However, one is also putting a tag on the other side and it is a waste. It is not a waste, it is an identity tag, but I cannot understand why farmers such as me then have to go back in July and August and then - in my case for 20 cattle every year - put a third tag into them just for genomes. I am actually tagging a calf that is idle for the year.
I have said this several times and it makes common sense. One could have a big scheme, especially for the genomes and the genes. There could be a proper scheme whereby, if a farmer had a spare tag, every female animal in the country could be tested at birth. I cannot understand why they could not introduce such a scheme for a reasonable cost instead of a farmer having to bring in adult cattle and take 20 cattle samples every year which is another tag in an animal's ear when it could be done at birth, even for the animal's sake. It is so simple when one thinks about it; the BVDP tag could be in one ear and the genomic sample in the other ear, and the farmer is doing it anyway.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is it.
Mr. Aidan O'Driscoll:
There is a difficulty in that a good deal of evidence shows the conventional tag to be more secure. We get about 4% tag losses of conventional tags and about 8% losses from tissue tags. A difficulty arises when there is a tissue tag in both ears. We must ask if it significantly reduces the reliability of the system.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I am talking about convenience and animal welfare.
Mr. Aidan O'Driscoll:
Yes and I take both of those points. We also looked at the option of a dual tissue tag. I will not say that it has had huge difficulties but it has not worked out for us. In this regard we must work with the tag companies, the laboratories and with the Irish Cattle Breeding Federation. For now, we are sticking with the current arrangement and that is what we propose to do for 2018. The BVDP tag is a scheme with a limited life. The tagging arrangement around the conventional tag and the tissue tag is a permanent, ongoing arrangement. Putting in a third button tag - as it is called - for BVD may seem a bit over the top, but it is for that specific scheme. It is a different function to the other two tags.
The other possibility to suggest itself is to have two tissue tags and no conventional tag, but there would be concern around the security of that.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I presume that when we are rid of BVD then the BVDP tag would go also, once we have clearance of the disease?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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So there is no reason the Department could not have done the same with the genome tags?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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My last question relates to the reported expense of €4.328 million for the Haulbowline site in Cork. What is the situation there? The clean up of the site has been a subject for a long time. The proposed expenditure for 2015 was €4.328 million. Was that money spent? It says in the report that it was deferred. What does the deferral mean?
Mr. Aidan O'Driscoll:
Haulbowline Island is situated just off Cork city. It contains an old slag heap from the days of the steel plant on the island. It is the subject of an environmental finding against Ireland because there is a danger of leaching into Cork Harbour. We have acquired the job of fixing that issue on Haulbowline Island, of ameliorating the site of the old steel plant itself and of rehabilitating some attractive old cut-stone buildings on the island. When that work is done we will hand the site over to the Department of Defence because the main occupant of the island is the Irish Naval Service. The Government has approved a plan costing €64 million for total works on the island. We are currently working through that. There has been some advance in the project with a tender put out, to which there has been a response, and discussions are continuing with the chosen tenderer on the costs of the most important parts of this work. The committee is seeing some of the very early costs mainly around planning and engineering expertise costs, but there will be a peak in the work on Haulbowline, due to fall around 2017-18, and after that it will trail off to nothing as we complete the work, and happily hand the whole thing over to the Department of Defence.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is the site owned by the State?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I know.
Catherine Connolly (Galway West, Independent)
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I was going to ask that question. I thought the site was to become a park and a public facility.
Catherine Connolly (Galway West, Independent)
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Is the plan just for some part of the island, and the remainder will be public?
Catherine Connolly (Galway West, Independent)
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On page 24 of the report there is an item called "conscience money". Can the witness explain what this is?
Catherine Connolly (Galway West, Independent)
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Is it returned anonymously?
Catherine Connolly (Galway West, Independent)
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My final question is the big question and maybe it cannot be answered at this point. Sitting here at each meeting, having listened to officials and having heard the questions that were raised about Bord na gCon today it occurs to me that we are giving out money even where there are governance issues with parent bodies which distribute the funds. For example, we have had the HSE before the committee with regard to Console. The issue keeps arising. Is the Department looking at this? Money goes to Bord na gCon, the Marine Institute and Horse Racing Ireland and then the Department is in here facing questions. I would love to see a proactive approach. Consider the HSE, for example, which was before the committee and justifying and auditing retrospectively. The Department is funnelling public money and then it is being asked how many times a year it is meeting - once a year in Mr. Gleeson's case or four times a year. What is the proactive plan with regard to the substantial moneys given to these bodies by the Department? The Marine Institute and Horse Racing Ireland have been mentioned here on occasions. What is the plan?
Mr. Aidan O'Driscoll:
This year there is a new guidance on oversight of State bodies by Government Departments - the Code of Practice for the Governance of State Bodies 2016. We are currently examining all our interaction with our State bodies to see whether they conform to the requirements of that new guidance. It is likely that this examination will lead to some changes. The Deputy's question is very well timed in the sense that we are reviewing the matter.
Catherine Connolly (Galway West, Independent)
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I will put that into our language; it would save us sitting here and putting the witnesses under pressure by asking questions, which we are doing repeatedly, with matters that should have already been taken in hand. We should not have to be here asking how many times has the Department met with Bord na gCon, the Marine Institute or Horse Racing Ireland when we are giving out substantial funds. The Department should be able to come in and tell us.
Mr. Aidan O'Driscoll:
We should and I apologise for that. I shall be quite honest with the Deputy; when we come to the Committee of Public Accounts we have no idea what it is we shall be questioned on. One of the reasons I have a collection of excellent people around me is because I come in to this committee with no idea of the line of questioning. That is fair enough, that is the system and no one complains about it. The Deputy is quite right that I did not know how many times the principal officer-----
Catherine Connolly (Galway West, Independent)
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I am not going back to that as I will leave that issue to the Deputies who asked about it. The more general issue is in holding to account the bodies to which the Department gives money, so that the Department is satisfied. In other words, would the Department be able to inform the committee today that the annual accounts are in from the Marine Institute, Horse Racing Ireland and so on?
Catherine Connolly (Galway West, Independent)
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Are the accounts coming in up to date and is the Department satisfied with its governance overview, particularly as result of everything that has happened with regard to Console and all the other issues?
Mr. Aidan O'Driscoll:
Yes I think we would be in a position to do that. I take the Deputy's point that the Department should be in that position. It is our responsibility to make sure that the reports that are required from the State bodies come in on time and are done on time. I have already taken on the point that the Bord na gCon 2015 accounts clearly should have been prepared earlier. I accept all of that. We do need to improve our engagement with them on such matters. I would, however, draw the distinction between the responsibility of the Department and that of the board.
It is very important to not blur that line, or nobody is responsible.
Seán Fleming (Laois, Fianna Fail)
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On the point made by the Deputy, this Committee of Public Accounts should ask every Secretary General who comes before the committee to provide a note in advance with regard to the agencies under the auspices of their Departments, to list each of the agencies or State boards funded by them and include their financial accounts. Maybe this committee should insist on that as a matter of form and it would probably be good practice for us, and for the Accounting Officers, across the board - not just in the Department of Agriculture, Food and the Marine. It is a good point.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Are there are penalties for the likes of Bord na gCon and the Irish Horse Board for when they -----
Seán Fleming (Laois, Fianna Fail)
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They just get more money.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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-----for when they do not have their accounts. We are talking about 2015, and the two Deputies here spoke strongly about it. Should there not be some reprimand made rather than continually paying out money? A figure of many millions of euro was mentioned. Should these organisations be getting this money if they do not come up to scratch? Should the Department withhold the funding? I know that the farming sector would not receive the money if we did something wrong.
Seán Fleming (Laois, Fianna Fail)
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That is a very broad point and we will come back to that. I recall that not so long ago there was a Dáil debate on Estimates for the provision of these funds. I am sure many Deputies trooped into the Chamber to say how wonderful these organisations were, that they should get funding and that they are a valuable part of the rural economy. I did not hear those speeches but I know what they were about.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We are talking about governance.
Seán Fleming (Laois, Fianna Fail)
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The Committee of Public Accounts may have a different position to take on those. What the Deputy has said applies across the board to lots of organisations.
At this stage we shall conclude the discussion. On behalf of the Committee of Public Accounts I thank the witnesses from the Departments of Agriculture, Food and the Marine, and Public Expenditure and Reform, and the Office of the Comptroller and Auditor General for the materials supplied to the committee and for participating today. Please note that we will not sign off on the accounts, it is not an issue and it is just a formality, until we receive those fuller accounts of the €1.2 billion that is paid through the EU. We do not have a full picture of the payments.
Seán Fleming (Laois, Fianna Fail)
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Please make sure that the information is provided around the accounts for which the Department is the paying agent. We want to see those accounts. It is not that we need to discuss them with the Department but we want to have them in front of the committee. There is no issue, but we have not got the full picture regarding payments to the agriculture sector without that other half of the equation. It will be a straightforward issue. We look forward to receiving information around funding that comes though Bord na gCon. The information can be forwarded through the secretariat.