Oireachtas Joint and Select Committees
Tuesday, 26 November 2019
Select Committee on Communications, Climate Action and Environment
Estimates for Public Services 2019
Vote 29 - Communications, Climate Action and Environment (Supplementary)
Today's meeting is to consider the Supplementary Estimates for Public Services for 2019 in respect of Vote 29 - Department of Communications, Climate Action and Environment. I remind members that in accordance with Standing Orders, the discussion should be confined to the items constituting the Supplementary Estimates. I invite the Minister for Communications, Climate Action and Environment to make his opening statement.
I thank the Chairman for accommodating this meeting. I know the committee has had a long day. This is essentially a token Supplementary Estimate to create a new subhead, F12 just transition, under which the €6 million allocated in the budget for the just transition fund will be paid. The early establishment of the subhead will facilitate expenditure from the just transition fund to commence in early 2020.
Everyone knows the background to this, which is the recognition that just transition is a core part of the climate action plan. This has been brought into very sharp relief by the much-accelerated rundown of peat in electricity generation, which members know all about. As a result and as part of the budget, the decision was made by the Minister for Finance that a substantial part of the moneys raised from the carbon pricing would be ring-fenced this year for just transition with a particular focus on the midlands. Three immediate measures were contained in the budget, namely, the just transition fund, the provision of €5 million extra to allow extra bog rehabilitation work to be done on non-Bord na Móna bogs and to provide €20 million to run a special programme in the midlands which would seek to build out retrofitting on an aggregated scale on an area basis. This is something we need to do anyhow to increase our capacity to deliver. This is being developed. At its core, there will be social houses in the region but the key to it will be to build wider participation than simply retrofitting social housing and to build momentum and aggregation and scaling up on a significant level, and doing this in the midlands where there is a particular need.
If the committee is interested I could go through some of the other work we are doing on just transition in the midlands but it is not directly associated with this because it has to do with repurposing the public service obligation, PSO, to allow additional bog restoration to a higher level on Bord na Móna bogs and other measures, such as the coal provisions under the EU treaties. We are seeking a token Estimate here to allow us to spend from this fund and to underpin the work Kieran Mulvey is starting as the just transition commissioner.
I welcome the Minister. We have had a number of discussions with the Department and the trade unions in regard to just transition. What we are creating is this new subhead to allow for what the Minister called a token allocation of €1,000, which is essentially to allow for the establishment in order that the expenditure in the budget can be spent. Is that not an acknowledgement that we are only starting this process? One of the questions I asked the Department was, given we all knew just transition was coming at us for some time, why is it only now that the funding has been put in place and why was it not done earlier. Why were the preparations for some of the budget allocations, such as the €20 million for retrofitting and the special programme in the midlands, only being put in place now and not much earlier?
The way in which we approached developing a climate action plan was very much a conscious one. When I took on this post, I was very conscious that high ambition had been set in the past and it had not delivered, so we needed a different foundation. That foundation was provided initially by the Citizens' Assembly and then by the work of the Oireachtas, in which I know the Chairman was intimately involved, as were many of the members of the committee. On the basis of that foundation, we have developed the plan, which involves, as the Deputy knows, a range of measures right across every sector and it includes just transition. In the immediate opportunity after the publication of the climate action plan, we see that just transition is embodied in the very first budget.
It is also significant that the commitment was made that in regard to carbon pricing, which is recognised by most parties as an inevitable part of making this transition, every cent of that is going to be ploughed back into helping communities to adapt. A big part of that adaptation is around just transition for people who are particularly exposed, such as Bord na Móna workers, or particularly ill-equipped, such as poorer households.
That is not to say there have not been programmes of just transition in the past. I know, from my own experience in the Department of Education and Skills, that every time there was a challenge, and there had been challenges in the past in Bord na Móna, there would have been a step-up by the education and training boards, the various education bodies and the Department of Employment Affairs and Social Protection, but they had been running on conventional tracks. What we are doing here is elevating this to a much higher level, recognising the scale of change that we have to deliver.
I welcome the response. I want to follow up with a number of questions. I will set out the problem. Patricia King, the president of ICTU, was before the Joint Committee on Climate Action last week and we had trade union officials before the joint committee earlier today. Essentially, they have stated that the infrastructure is woefully inadequate, that the just transition has not got off to a good start and two plants have closed prematurely, and that many of the solutions which the Minister says he is putting in place are not yet in place.
I want to raise two specific issues which are important in terms of the Minister's approach to this issue. One of the questions the trade unions asked us to ask the Minister, as it was not clear from the departmental response, was why the just transition commissioner was not given responsibility or powers in respect of industrial relations. That seems to be a sore point for the trade unions. Second, in regard to one of the main solutions the Minister talked about, the special programme of €20 million for the midlands, that is €20 million for retrofit. However, we do not know yet how that is going to work, how many homes will be retrofitted, what type of homes they will be, what will be the average cost per home or whether there will be a guarantee that people who are employed in any of these plants will get the jobs at the end of it. These are questions we are being asked and we do not have the answers to them. We put those questions to the Department officials both at the Committee of Public Accounts and at the joint committee but they do not have the responses because they are saying it is in the early stages and it is being worked on, which is part of the problem. Does the Minister have those responses?
To recap, why was the just transition commissioner not given any responsibility in regard to industrial relations, given the unions are quite upset about that? Incidentally, they are also very upset with Bord na Móna, which they say is not engaging and is playing for time. They have a fear that the strategy is to de-unionise that organisation. In terms of the €20 million for the retrofit programme, how is that going to work, how many homes will be retrofitted, what will be the average cost of a retrofit and will there be a guarantee that whoever gets the contract to do that will employ people who need to be employed, from these plants or elsewhere, as part of what is being described as a just transition? There are a lot of questions so I will allow the Minister to come back in.
First, the Deputy should not have the impression that there was no anticipation. For example, on the regional enterprise strategy, in my previous role I set up the concept of having regional enterprise plans and, at the heart of that, was the just transition. That was in place long before this particular problem. The regional skills forums are also established and they recognise this is a key challenge. When I went to the area recently, I met both those who are driving the regional enterprise strategy and the regional skills strategy to make sure they would be capable of providing, for example, the upskilling that is needed for people to switch, if they are going to switch from work on the bogs to work in retrofitting. Skills programmes will be put in place to ensure people can make that transition.
The Deputy asks why everything is not in place. This decision was not expected. The expectation had been that co-firing would continue but we have moved very swiftly to ensure there is money available and that we have a programme which is relevant and which requires a skill set or similar. We have also received permission, which is at its final stages, to repurpose the PSO in order that many of the workers in Bord na Móna will be able to continue working on restoring bogs to a much higher level than would have occurred had Bord na Móna simply fulfilled its licence obligations. It is part of a strategy to make sure that the asset of the bogs is fully exploited in terms of its capacity to absorb carbon. A higher level of restoration is necessary to do that and we will be able to deliver that.
The reason responsibility for industrial relations has not been given to the just transition commissioner is that we have established models for dealing with industrial relations through joint industrial councils and referrals to the Workplace Relations Commission, WRC, and to the Labour Court. Those are tried and trusted methods. The head of the WRC, Liam Kelly, is someone with immense experience. We have those resources. I know that because Kieran Mulvey had been in the WRC, some people would say that, naturally, he should be doing industrial relations. However, the truth is he is retired from that and there is a new executive and a new WRC in place. It would be not be right to seek to have a just transition commissioner, who is trying to deal with the new elements of this, usurping the role of a long-established body such as the WRC or the Labour Court, as appropriate. That is why there is that approach.
The terms of reference are there. I have met the unions and I have met the company. I know there are difficulties and the company, the workers and the unions will have to work through those difficulties. I also met Patricia King and I understand the frustrations and the concerns. It is fair to say that having a just transition commissioner is something that is generally welcomed; the unions were pleased that I moved swiftly on that. I believe they recognise this is a good step forward. Of course, there are difficulties. I am the first to recognise that many people felt they had a long transition of seven or eight years on which they could bank but that has now been disrupted and we are trying to manage it as best we can.
The cost is approximately €20,000 per home. This is not solely about grant aid to local authorities to retrofit social housing. It is expected that approximately 1,000 houses will be retrofitted but this is only the spine of what we are doing. In conjunction with this, we are doubling the warmer homes budget to ensure that not only social housing but a mix of housing is upgraded, although not all of the latter will receive 100% State support to deliver the change. We are working on an area basis to aggregate the contracting out of the work and the guarantee of the quality of the work and, hopefully, to make access to funds easier.
On the €20 million, the Minister is saying that there will be a mix in terms of who can avail of the, on average, €20,000 retrofit grant. Some of the applicants might be social housing residents through local authorities but others will be people who will have to pay a level of capital upfront. We need to monitor this area to ensure that the majority of applicants are not in the latter cohort because it, I imagine, will be people who will have the deepest pockets and benefit most from having their homes retrofitted.
This needs to be done fairly to ensure there is an appropriate mix. I would argue that the majority of the retrofit needs to be to local authority housing, such that there will be a minority of private residents who can make a capital investment.
On the just transition fund, €31 million was announced for a retrofit programme and bog restoration. There appears to be some confusion about how much of that allocation is new money and how much is old money rolled over from the previous year. Perhaps the Minister will clarify the situation.
All of the €31 million is new money. There is no roll-over. The €20 million is allocated through the Department of Housing, Planning and Local Government, as opposed to the Department of Communications, Climate Action and Environment. The Deputy will be aware that another element of the just transition is the doubling of the warmer homes allocation for poorer families. That is a separate element. The €20 million, €5 million and €6 million are all net new money.
The just transition commissioner will liaise directly with me. We will seek to work with communities. I have already met a number of communities on projects they believe are ready and relevant. We need to sift through those projects.
My Department will administer the fund in the same manner as it administers the allocation under the climate action fund. In regard to applications and selection criteria, Mr. Kieran Mulvey will have a particular role in that regard. Payments will issue on foot of a valuation of the projects brought forward.
In the Minister's opinion, do the local authorities and the Sustainable Energy Authority of Ireland, SEAI, have adequate resources to meet the expanded remit and response in the midlands for next year?
Yes, it is. It is not the only area in which the SEAI is expanding in that we are also expanding the warmer homes scheme. It is a challenge to design a new programme. I recognise that and I have asked the Secretary General of my Department to chair the group that is seeking to design a model that will scale up delivery. We have been working on the basis of largely individual applications for the warmer homes and better energy home schemes. The better energy communities scheme has involved some aggregated work. We have to move to a much more aggregated model if we are to hit the targets. We need to design that model. We are meeting the Strategic Banking Corporation of Ireland, SBCI, key local authorities and across the sectors of people we believe might assist, including the European Investment Bank, to design a model that will be robust, can be scaled up and will give people more confidence to take on the work that increasingly, people recognise they should be doing on their homes. There is upfront cost and the savings accrue slowly and many people find it hard to get access to upfront capital so we need to design a model that is easy for them to lock into.
At a prior meeting I raised with the Minister's officials the reason for the downgrading of the just transition task force to a review group. What does the latter entail? The perception is that a review group does not match the spirit of the recommendations of the cross-party committee report of last March.
The National Economic and Social Council, NESC, which is a long-established body, worked for years with all of the social partners involved. It has an established track record and an established administration. It also has experience in dealing in innovative ways and providing guidance to not only Government but all of the partners on how to be innovative and respond to change. I saw the NESC as a natural choice to do the type of work that we wanted done here. It will carry out the review and make recommendations on the models we should have over the next decade. It will be offering a significant policy guidance. What we have in the just transition commissioner is a more immediate on-the-ground response in terms of meeting individual bodies, designing the models that can make a difference in the midlands, working with local authorities and community groups through the regional enterprise strategy on how we can mobilise the resources, both Government and wider funding in terms of the Project 2040 funds of €4 billion. I would see those as areas that we can mobilise as well.
The Department of Public Expenditure and Reform has raised concerns in regard to impact of the national broadband plan on proposed climate change actions under Project Ireland 2040 in that the Government has not provided a financial pathway for some of the national development plan objectives. Is there a concern that there will be gap in funding because of the Minister's decision to proceed in this area?
The Government made a decision to allocate additional resources to fund the national broadband plan. The previous €116 billion programme is now €119 billion but none of this will impact on any of the other funds.
He was wrong because the Government took a decision to provide additional resources to ensure that this plan would be delivered. In focusing on the national broadband plan, we are straying a little from a just transition.
I am happy to stay here all night and talk about it. Like it or not, in 20 years' time, people will reflect on the questioning as to whether rural Ireland should have access to high-speed broadband as not recognising the realities. In terms of the transformative power of these technologies, it would be very short-sighted to not do it.
The just transition is absolutely interlinked with the budgetary position of the Department over which the Minister presides. If it has made a decision to allocate additional resources to another project it may impact on issues such as the just transition.
The Chair asked me to explain. If a company such as Oak Hill, which is providing the financial equity for the project, collapsed, what is the liability of the Department for that equity? When would it become involved? That absolutely would impact on issues such as the just transition and climate action.
It is fortuitous that this is following the discussion on our just transition Bill. The officials made clear that the backup secretariat for the new commissioner will be in the Department. I expressed a fear that given the Department's massive challenges in so many areas, including broadcasting, communications, energy and climate change in its own right, even if it is a stopgap measure while the NESC report is awaited, the Department does not really have the necessary resources for the broad suite of work that will have to be done to get the just transition in the midlands right. Has the Minister sought additional staff for the climate change section to help?
We have indeed and we have obtained some additional capacity. There is no doubt this is a challenge. Developing a climate plan and working bilaterally with several Departments trying to get agreement throughout the public sector has put a big strain on the resources of the Department. As the Deputy rightly demands, we are working on a climate Bill, which we hope to publish soon. It is a challenge but I must say that people have stepped up to it. There is a great sense of commitment in this area. We will have to see more resources progressively allocated to the Department to conduct its responsibilities. We have an additional €2 million for new staff in the budget allocation for 2020. I expect we will continually need additional capacity to do this. We have a great team whose members are very committed and are delivering.
With regard to the meeting on the midlands we had last week with trade unions and other groups, there was a clear desire to have access to the Workplace Relations Commission, not necessarily to look at industrial relations but to have a location where a variety of stakeholders can be brought in. The plan for the midlands must be integrated. It must look at a range of connected issues, including the ramping up of training, educational and skills development and the involvement of other landowners and other scientific and environmental actors. As was said at our earlier hearing, this is our first go at this. If, in the broadest sense, we do not get the partnership approach right with regard to bringing in all stakeholders, we will start on the wrong foot and it will become more difficult each time we come to a transition area where we need to get public, worker or stakeholder support. Why would the Government not support the use of the Workplace Relations Commission in the absence of our Bill, which would provide such a mediation-type service? How does the Minister intend to respond to the call from Patricia King for the use of the Workplace Relations Commission in this regard?
The process of industrial relations, and I worked on that brief for a while, is that if there is a local arrangement such as an industrial relations committee, which there is in Bord na Móna, that is where issues are dealt with. If they are not resolved they go to the Workplace Relations Commission, which is the experienced body in industrial relations. The reality is that just transition goes much beyond industrial relations issues. For example, we need to see quality education programmes, which would be delivered by institutes of technology and education and training boards. We need to see the development of enterprise hubs, which fall to be delivered through bodies such as Enterprise Ireland and the local enterprise offices. We bring the various challenges to those who have the experience. I do not think it would be appropriate to ask bodies with experience in industrial relations to become experts suddenly on how to develop an integrated plan on bog restoration, retrofitting, enterprise hubs, retraining and dealing with communities that have been disrupted. This is a much broader agenda. What we are doing is falling back on NESC, which is tried and tested in looking at where big social transitions have had to occur in the past. It has that expert experience. We are also putting in place someone who is recognised as having the capacity to help us design a model that is tailor made to the needs of the midlands. We will use the resources of the State to support the type of recommendation that will come forward. The response we have is the most appropriate one. It uses people who have established skills in the areas where they are most likely to deliver results.
The Minister in making the case in many ways for our Bill and I hope the Government will row in behind it to provide exactly that holistic experience and skill resources. Our Bill will not be legislated any time soon. Mr. Mulvey will not be in place until the new year.
What Patricia King is arguing, and it is commendable and makes sense, is that this is an urgent issue in the midlands, that the local people are losing confidence, as are the workforce, and that the current mechanisms are not working. The joint industrial relations mechanisms may suffice for some of the particular industrial relations issues but, as the Minister says, it is much bigger and broader than this. What we heard today from the union officials is they believe the Workplace Relations Commission is very keen and happy to take on such a role to act as an immediate facilitation point to bring in wider stakeholders.
I do not see what we have to lose from using that avenue to do what we have historically done in difficult circumstances like this, use a partnership approach.
There is no problem with the Workplace Relations Commission getting involved with industrial relations issues in Bord na Móna. That is what it has done. It has advisory and mediation services. Where there are unresolved issues, parties can go to the Labour Court for adjudication, where people agree. We have a well-established industrial relations process. That will be triggered by the parties as issues evolve. The Deputy seems to be suggesting that the Workplace Relations Commission would become a very large tent for all sorts of governmental policy along the lines of his own Bill but that is not what the Workplace Relations Commission was designed to do. Industrial disputes are referred to it every day of the week and it deals with those. It has an expertise and will no doubt become involved in Bord na Móna on issues of difficulty as those issues are escalated through the industrial relations mechanism. They are not a body such as the commission the Deputy proposed in his Bill with the sort of powers he envisaged for it, which he is examining.