Mr. Maurice Buckley:

The previous time we were here, the chairman and one of the management board members were female, which was 25% of our representation. Temporarily at least, we have taken a step backwards but not in the whole organisation.

I thank the Chairman for the opportunity to present to the Committee of Public Accounts the expenditure and works of the Office of Public Works across its different areas of activity. The OPW is the lead body responsible for flood risk management and the stewardship of the nation’s national monuments and historic properties. Through these activities, the OPW interacts with and supports communities and local authorities in every county in Ireland.

The third primary area of OPW activity is the management of the State’s modern property estate, including accommodation for Government staff and numerous specialist facilities such as Garda stations, courthouses, laboratories, data centres and customs infrastructure, which has become topical again now in the context of Brexit. I provided an information briefing on Garda accommodation in advance of this meeting. Later in this statement, I will address the matters raised in Chapter 6 of the Comptroller and Auditor General’s report titled, Lease of Offices at Miesian Plaza.

The OPW is responsible for a range of other important functions, including the State art collection, the day-to-day running of Áras an Uachtaráin and organising State visits and events. Recent examples of events include the May referendum, the visit of Pope Francis in August and the upcoming inauguration of the President.

As Members are aware, flooding is a natural phenomenon which can cause widespread damage and have a devastating effect on communities, property and infrastructure. We have to think only of the poor people in Spain who suffered a disaster of flash flooding in the past couple of days when ten people lost their lives. This risk is likely to increase in the future due to rising sea levels and other potential effects of climate change. The Government has recognised these risks and committed €1 billion of capital investment to flood risk management over the next decade.

The OPW has responsibility for leading and co-ordinating the implementation of the national flood risk policy, which involves the development of a planned programme of works. In 2017, the OPW completed the largest study of flood risk ever undertaken in the history of the State, the catchment flood risk assessment and management, CFRAM, programme. The CFRAM programme involved analysis of flood risk across 300 designated communities, including 90 coastal areas and the production of 29 flood risk management plans with a prioritisation of those measures that can manage the assessed flood risk nationwide. It includes building our capability to protect 95% of properties assessed to be at risk through 118 new flood relief schemes in addition to the 75 schemes that are complete or under way.

This capital programme was launched on the 3 May 2018 and we are now moving into the detailed development and implementation of these measures with the local authorities. During 2017, the OPW carried out capital works at a cost of more than €45 million, including the completion of major projects at Bray and Foynes; the substantial progression of construction on schemes at Bandon, Skibbereen, the River Dodder, Claregalway and Dunkellin River; the provision of more than €2 million to local authorities to carry out minor flood works; the commencement of new schemes in Athlone and Templemore; and the progression of design work on a large number of other major schemes to be implemented in the coming years. In addition, the OPW maintains all arterial drainage schemes completed by it under the Arterial Drainage Act 1945. This investment involves providing ongoing protection to 263,000 ha of agricultural land through the annual maintenance programme for 11,500 km of river channel, including 800 km of embankments.

My office manages a range of other measures to tackle flood risk, including the OPW minor flood mitigation and coastal protection scheme in partnership with local authorities. A total of 500 projects have been completed under this scheme protecting 6,500 properties, two thirds of which are outside the CFRAM study areas.

The OPW continues to support and co-ordinate sectoral led work on non-structural solutions to help protect and-or mitigate flood risk. Key to these solutions is the development by Met Éireann, in conjunction with the OPW, of a national flood forecasting service. Also, a new website, www.floodinfo.ie, has been developed by the OPW. This is an important resource in supporting emergency response planning by local authorities and empowering people and communities to plan and respond to their flood risk.

As caretakers of the built heritage estate, the OPW is responsible for the management, conservation, maintenance and presentation of some 780 national monuments and 70 OPW managed heritage sites. Responsibilities include the day-to-day management and presentation of 30 major historical properties, gardens, parks and arboreta.

The OPW has consistently been of the opinion that the importance of the State’s national heritage cannot be overestimated, either in a cultural or economic sense. This is especially true in the context of rural regeneration and is borne out by the increase, year on year, of the number of visitors to these sites. The OPW enjoyed a very successful 2017 with a record total of 7.9 million visitors to OPW managed heritage sites. The leading visitor sites continue to do remarkably well, including Dublin Castle, Kilmainham Gaol, the Rock of Cashel and the Phoenix Park, the largest city park in Europe and an enormous green resource for the people of Dublin.

In addition, a strategic partnership with the Department of Culture, Heritage and the Gaeltacht and Fáilte Ireland has enabled the OPW to develop and enhance tourism investment possibilities within the cultural and heritage estate. The broad focus of this programme is to enhance the visitor experience at sites managed by the OPW, with particular reference to less visited sites so that a greater volume of increased footfall on a wider base can be sustained. This will ensure that we continue to increase tourism numbers and the generation of Exchequer revenue.

Efficient and modern accommodation is a key requirement for the successful delivery of many Government priorities. Estate management by the OPW is an all encompassing discipline of strategically aligning the use of State and leased property with Government priorities while ensuring value for money through the optimal use of resources. Estate management includes the acquisition and disposal of properties and leases, essential property maintenance, necessary development and retrofits and the provision of storage and mechanical and engineering works to more than 70 different client Departments and public bodies. In order to facilitate the management of that portfolio the OPW is developing a much needed estate management system which will shortly go live in the office.

The system will provide centralised information to staff, which will allow for effective and efficient estate management planning in the commercial environment within which the office operates.

On climate change, members will be aware that the recent Citizens' Assembly recommended that the State take a leadership role in addressing this risk through mitigation measures, including retrofitting and renewables generation on public buildings. The OPW portfolio consists of more than 2,500 properties and the total investment was €319 million in 2017, which included the fit-out of several properties, including Miesian Plaza.

I will now turn to the Comptroller and Auditor General's chapter on the lease of offices at Miesian Plaza. The lease was part of the OPW accommodation strategy to move staff from Hawkins House, a large, end-of-life building, to a fourth generation energy-efficient building that could support almost 1,000 staff. Miesian Plaza, at approximately 15,000 sq. m, is the largest lease acquisition that the OPW has secured in recent years and has 936 workstations. The imperative of acquiring a new headquarters for the Department of Health arose from the deteriorating condition of Hawkins House which was constructed in the early 1960s. In addition, the lease on a property on Mespil Road which accommodated the Department of Children and Youth Affairs was due to expire and could no longer cater for the expanding requirements of that Department.

Following a review of the available properties in what was an exceptionally tight market, Miesian Plaza on Baggot Street was identified as the most suitable option for the Departments of Health and Children and Youth Affairs and certain units of the Departments of Finance and Public Expenditure and Reform. Central to its acceptance as a potential location was its proximity to the Houses of the Oireachtas. The OPW retained an independent professional negotiation team to determine if a satisfactory commercial arrangement could be concluded. Following several months of engagement with the landlord, the negotiation team secured a 25-year lease at approximately 15% below the prevailing market rent. With the addition of five-year rent reviews linked only to the consumer price index, the deal effectively insulates the State against any significant or erratic market fluctuations in the medium term. In the context of the rising Dublin property market, which is related to Brexit, the OPW considers this index linking to be of significant benefit.

The large-scale permanent relocation of any group of staff is a challenging task. This was particularly complex in the Miesian Plaza project because of the physical and cultural challenges of moving almost 1,000 staff spread across four major Departments. It is a common misunderstanding that the identification of a building and securing of lease terms are effectively the end of the process and that people just move in. In fact, it is only at this stage that the fit-out process which transforms the building from a grey shell to a habitable modern office and takes up to ten months can commence. These issues were particularly intense in the Miesian Plaza project in light of the ground-breaking steps being taken relating to open plan work spaces and a dramatic reduction in the use of cellular offices. The project very quickly moved from one involving mere bricks and mortar to one encompassing human relationships and business process reform. In the OPW’s experience, it is quite common that staff and business considerations trump those relating to the physical building in terms of complexity and the time needed to complete the project.

Reflecting on the project, I suspect that some aspects, including the change management process, were underestimated by all involved, including the OPW. The protracted discussions designed to ensure buy-in and to bring everybody along on a difficult journey undoubtedly caused delays. The cost of the delay is very much regretted by the OPW and, I am sure, all those associated with the project.

It is rare for major projects to progress without some problems. The Miesian Plaza project experienced problems, including the aforementioned programme overrun and an issue relating to the application of a new measurement standard. Although those issues serve to lessen the very significant value negotiated, the demonstrable benefits of the overall deal and ground-breaking business transformation outcomes significantly outweigh all other considerations. The building secured by the OPW will serve as a flagship for the State’s property portfolio for the next 25 years while accommodating some of the most important Departments in a leadership in energy and environmental design, LEED, platinum-rated office accommodation.

I thank the Comptroller and Auditor General and his staff for their assistance and courtesy during the audit. I have no doubt that the committee and Chairman will have questions on the matters I have raised. I thank them for their attention and will attempt to answer any questions they may have.