Mr. Michael McCarthy:

I thank the Chair, the committee members and the secretariat for the opportunity to address the committee this morning. I reiterate my thanks to the committee for the invitation. It is an honour for me to be present as the Minister's nominee for the chair of the National Oversight and Audit Commission. I welcome this important first engagement and I am very much looking forward to working with all stakeholders in this new role. I hope to continue the good work that has already been completed to date and to build on this work so that real reform is evident and that any challenges in perception and reality are addressed. I am aware that real reform takes time and that only through working together will we continue to make the necessary progress over the coming years. I come to NOAC with great interest and an understanding of local government and with a genuine belief that I can make a useful contribution to the work of NOAC. I am coming into this role without baggage or any conflict of interest. This will allow me to engage credibly with all stakeholders and hopefully bring some fresh thinking and new ideas to further enhance the role of NOAC.

I will begin by outlining what NOAC is about and how it operates. NOAC was established in July 2014 as an independent statutory body to provide oversight of the local government sector in Ireland. It is a key element of the local government reform agenda that emerged from the proposals set out in the action programme for effective local government. It is underpinned by the Local Government Reform Act 2014. NOAC’s functions are wide-ranging, involving the scrutiny of performance generally and financial performance specifically. NOAC also supports best practice, oversees the implementation of national local government policy, monitors and evaluates implementation of corporate plans, adherence to service level agreements and public service reform by local government bodies. A Government Minister may also request that NOAC be asked to prepare a report, relevant to its functions, on any specified aspect of local government.

NOAC has published 18 reports to date. Its reports and recommendations are presented to key decision makers in the local and national government sector including the relevant Joint Committee of the Houses of the Oireachtas. NOAC publishes annual local authority performance indicators and composite public spending code quality assurance reports. Those published to date cover the years 2014, 2015 and 2016. The 2017 reports will be published early in quarter four of 2018. The annual performance indicator report published by NOAC is one of its key reports every year. NOAC has the function of scrutinising local authority performance against relevant indicators. The performance indicator sub-group’s mandate is to recommend appropriate performance indicators for local authority activity and to oversee the data collection, verification, compilation and publication of a report on those indicators annually. NOAC believes that monitoring performance over time and against comparable authorities has the potential to encourage continuous improvement in local authority service provision. A list of all NOAC’s published reports is available on the NOAC website.

NOAC operates a sub-group structure covering the areas of performance indicator reporting, customer surveys, financial performance, housing studies, local enterprise offices, LEOs, reporting under the public spending code, PSC, and the oversight of efficiency reform implementation. Each sub-group consists of three to four members, who take responsibility for progressing various projects, with regular reporting to the full NOAC when key decisions are required. The nature of NOAC’s statutory functions means that there will be an on-going requirement for some sub-groups, while others may only exist for the duration of a particular project. NOAC’s membership is statutorily prescribed as a minimum of six and a maximum of nine members. There is provision for the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, to increase, by order, the number of members to a maximum of 12 for a period of up to two years. SI 536 made by the Minister on 19 October 2016 increased the number of members to 11.

NOAC does not have a separate executive and the Department of Housing, Planning and Local Government provides its secretariat. Earlier this year, a new section was established with a staff complement of five to provide the secretariat functions for both NOAC and the new water advisory body.

As I have mentioned, NOAC’s role in local government policy is to oversee how the national policy is implemented by local government bodies. NOAC does not have a function of providing input into the development of policy for the sector. When it comes to financial performance, NOAC’s role is to scrutinise the performance of any local government body in respect of the financial resources available to it, including value for money. To fulfil this function, NOAC carried out a review of local authority rates collection performance because this is a significant revenue source for the sector. It also reviews the reports by the Local Government Audit Service, LGAS, of its annual audits of local authority financial statements and follows up on selected aspects raised in those reports. NOAC also reviews value for money reports produced by the value for money unit of the LGAS. Regular meetings are held between NOAC and the director of the LGAS, and NOAC has established a good working relationship with the director there and her team.

In 2017, NOAC started compiling profiles of each local authority based primarily on the material in our reports and meetings with the chief executives. The profile also included information provided by the authorities themselves outlining the particular context within which they each operate. The chief executive and management team attend a NOAC meeting to answer questions from the NOAC members on topics such as finances, customer service, corporate planning, housing issues, performance indicators, tourism initiatives, employment within the county, and economic and community development. To date, three meetings have taken place with Louth and Offaly county councils and Cork City Council. It is planned to progress and expand on this work in the remainder of 2018 and into 2019 using the recent validation visits for the performance indicators report as a first step in this process.

Customer service is an important area and NOAC is engaged in a three-year programme of carrying out a customer survey for similarly sized local authorities. The report for the largest ten local authorities was published this summer. Work will continue in 2018 on a local authority customer satisfaction survey for the next ten largest local authorities. Other areas being worked on are reviews of aspects of financial performance and the internal audit function, as well as the annual performance indicators and public spending code quality assurance reports.

I am aware that NOAC receives substantial support and assistance from the Local Government Management Agency, LGMA, particularly in the collection and compilation of data for the performance indicators report. The LGMA’s assistance in organising NOAC events such as the very successful good practice in local authorities seminar and the customer service workshops was also invaluable. NOAC will periodically hold such events to disseminate clever and innovative practices or examples of efficiencies in the performance of local authorities that it encounters in its work. It is important that this relationship continues to grow and develop so that real alignment with the local government sector is evident.

At all times I will be conscious of the role of NOAC and will be striving to see NOAC recognised as an organisation that can deliver real reform. Central to this will be making sure that local authorities are delivering real value for money while adhering to proper governance. NOAC will also ensure that it supports the best practices that are central to the work of local authorities. Successful transformation requires robust planning, clear and coherent leadership and suitably skilled staff. The impact of increasing demands across local government, the changing landscape in which councils operate, and the impact of the significant uncertainty as well as increasing complexity brought about by Brexit mean that planning and oversight have never been more important. Robust plans that project how local authorities’ outcomes and priorities will be delivered and funded are essential to ensuring the sustainability of services to the public. It is important that NOAC be there to ensure that these decisions are taken in a planned and co-ordinated way and that the impact of decisions on communities and outcomes is transparent and understood.

I very much look forward to working with the NOAC members, chief executives, liaison officials and performance indicator co-ordinators of the 31 local authorities and with the other bodies, agencies and Departments that supported NOAC in its work. I express my gratitude to the outgoing chairman, Pat McLoughlin, for the time he has taken to update me on the role and for the valuable and extensive work that he has carried out during his time as chairman of NOAC. He and his board members have done some valuable work, and I look forward to continuing the very important work they have started.