Oireachtas Joint and Select Committees
Thursday, 16 November 2023
Public Accounts Committee
Appropriation Accounts 2022
Vote 11 - Public Expenditure, National Development Plan Delivery and Reform
Vote 12 - Superannuation and Retired Allowances
Vote 39 - Office of Government Procurement
Vote 43 - Office of the Government Chief Information Officer
2022 Report of the Comptroller and Auditor General
Chapter 5: Vote Accounting and Budget Management
No apologies have been received. Everybody is very welcome. I remind all those in attendance to ensure their mobile phones are on silent mode or switched off.
Before we start, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. This means that witnesses have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that it is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
Witnesses are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of a person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
Members are reminded of the provisions of Standing Order 218 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 policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied this morning by Mr Paul Southern, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning, we are engaging with officials from a Department whose name has changed since the last time it was before the committee. I will try to get it right. We are engaging with the Department of Public Expenditure, National Development Plan Delivery and Reform to examine Vote 11 - Office of the Minister for Public Expenditure, National Development Plan Delivery and Reform, Vote 12 - Superannuation and Retired Allowances, Vote 39 - Office of Government Procurement, Vote 43 - Office of the Government Chief Information Officer and chapter 5 of the 2022 report on the accounts of the public services, which relates to Vote accounting and budget management. A number of areas of interest have been flagged by members. These include the format and content of appropriation accounts, the delivery of the national development plan and the public spending code.
We are joined by officials from the Department: Mr. David Moloney, Secretary General; Ms Niamh Callaghan, principal officer, expenditure policy division; Mr. John Pender, principal officer, work and pensions division; Mr. Kevin Meany, principal officer, national investment office; and Mr. David Feeney, principal officer, corporate office. They are all very welcome.
I call the Comptroller and Auditor General to deliver his opening statement.
Mr. Seamus McCarthy:
Gabhaim buíochas leis an gCathaoirleach.
As the members of the committee are aware, the Secretary General of the Department of Public Expenditure, National Development Plan Delivery and Reform is the Accounting Officer for several Votes, reflecting the responsibility of the Department for the development and administration of a number of key cross-departmental functions in specialised and technical areas. Additionally, arising from its responsibility in relation to central control and oversight of public spending, the Department sets the general accounting policies for all appropriation accounts and issues binding directions around public financial management and procedures and the corporate governance of public bodies.
I issued clear audit opinions in relation to each of the appropriation accounts for 2022 being considered this morning. In each case, amounts provided but remaining unspent were liable for surrender at the end of the year. The 2022 appropriation account for Vote 11 - Office of the Minister for Public Expenditure, National Development Plan Delivery and Reform, records gross expenditure of almost €45 million. This spending was divided between two spending programmes, which were broadly similar in scale. Departmental staff pay accounted for €24.9 million, while grants to support several aegis bodies accounted for just under €10.4 million. At the end of 2022, the Department had a surplus of €5.4 million relative to its budget for the year.
Vote 12 - Superannuation and Retired Allowances, is used to pay pensions to retired civil servants across Departments and offices and to retired prison officers. Pension payments for other public servants are charged, directly or indirectly, to other Votes, including those for education, health, An Garda Síochána and Army pensions. The gross spend on Vote 12 in 2022 amounted to €763 million. Appropriations-in-aid, mainly comprising employee pension contributions, amounted to €509 million. The receipts in the Vote were significantly ahead of the level forecast. Receipts in respect of the post-2012 single scheme contributions were €73 million, or 21%, more than estimated. The net outturn on the Vote for 2022 was a surplus of €100 million.
The Office of Government Procurement, generally referred to as OGP, carries out specialised functions in relation to the procurement of goods and services by public bodies in Ireland. This includes the putting in place of framework agreements that public bodies are generally expected to use to procure required goods and services. The 2022 appropriation account for Vote 39 - Office of Government Procurement, records gross expenditure of €18.3 million. The surplus at the end of 2022 amounted to €1.6 million.
The Office of the Government Chief Information Officer, OGCIO, provides an ICT shared service to a number of Departments and offices. This includes the provision of video and data services, email and productivity applications across the public service, while guarding against cyberattacks. The 2022 appropriation account for Vote 43 records gross expenditure of €43 million. Included in this is €18.5 million spent on the national low latency platform project, which is part of the post-Covid EU recovery and resilience plan for Ireland. The net surplus on the Vote at the end of the year was €368,000.
Chapter 5 is a recurrent report which aggregates and summarises the results of all appropriation accounts, highlighting trends and any unusual patterns in voted spending. As can be seen in figure 5.2, there has been a strong upward trend in voted expenditure in recent years, with a significant increase from 2020-22 as a result of additional expenditure requirements due to the Covid-19 pandemic and emergency measures introduced in response to cost-of-living increases.
Members may wish to note that the 2022 appropriation accounts include new information in respect of staff pay bands and remuneration of Accounting Officers, as previously requested by the committee. This brings the disclosures in respect of pay in the accounts more into line with the disclosures required of other State bodies under the provisions of the Department's Code of Practice for the Governance of State Bodies. Separately, the Department is leading a project to move central government accounting from a modified cash basis to an accrual basis. This includes the development of new central government accounting standards, CGAS, which I understand are expected to start coming into force from January 2024. I thank the Cathaoirleach.
Mr. David Moloney:
I thank the Cathaoirleach and the committee for the invitation. There is a great deal of detail in the statement and, with the Cathaoirleach's permission, I will take much of it as read and briefly summarise the contents of each of the agenda items.
The agenda of my Department is to drive the delivery of better public services, living standards and infrastructure for the people of Ireland. To support this, we undertake a range of actions under our strategic goals of enhancing governance, building capacity and supporting effective delivery. In relation to my Department's financial performance in 2022, the appropriation account for Vote 11 shows that the net outturn was €41 million compared to an estimate of €46.5 million. This gives a surplus to surrender of €5.5 million. This surrender was partly due to higher receipts than expected of €947,000, savings on payroll of €1.6 million and a saving of €1.7 million relating to the management of EU programmes.
In respect of Vote 12 - Superannuation and Retired Allowances, the net outturn for 2022 was €253.3 million, compared to an estimate of €353.4 million. This gives a surplus to surrender of €100.1 million. The surplus arose primarily due to an underspend on established Civil Service pensioner lump sums and greater than anticipated contributions received under the single public service pension scheme.
In relation to the OGP financial performance in 2022, the appropriation account shows the net outturn was €17.8 million, compared to an estimate of €19.5 million, giving a surplus to surrender of €1.6 million. This was mainly due to lower than expected expenditure on staff due to recruitment challenges.
The OGCIO Vote provides a funding model to deliver the Department's vision of a single, common ICT service platform and to support the digital government agenda. The net outturn for the OGCIO Vote in 2022 was €42.9 million, compared to an estimate of €43.3 million. This gives rise to a surplus to surrender of €368,000. As the Comptroller and Auditor General said, it is important to note that €18.5 million of the 2022 estimate relates to the national recovery and resilience plan.
Turning to chapter 5 of the report on the accounts of the public services, the Appropriation Act 2022 provided for spending on voted services totalling €78.1 billion. There was also unused capital funding of €819.3 million carried over from 2021, bringing the total available Vote funding to €78.9 billion. This level of funding supports the provision of a wide range of public services, infrastructure investment and income supports.
In the note, I set out several drivers of spending in 2022 and pointed out that the figure of €7 billion for Supplementary Estimates approved by the Dáil in 2022 was driven by factors such as the war in Ukraine, the new public service pay deal, the cost-of-living packages and the additional funding requirements of particular Departments. Of the €7 billion, €4.6 billion was already provided for contingency funding under the expenditure ceiling, and the expenditure ceiling was extended by a further €2.3 billion. At the end of the year, a surplus of €2.8 billion was recorded, of which €687 million was approved for carryover, meaning a surrender of €2.1 billion.
Overall, surplus appropriations have been higher since 2020. This coincides with the outbreak of the pandemic and the introduction of non-core expenditure to deal with particular shocks related to the war in Ukraine, the pandemic and the cost-of-living crisis. My Department continues to review our expenditure monitoring and management processes to ensure allocations are informed by the best available information.
In terms of the format and content of the appropriation accounts, we provide an amount of information in this regard. Within central government, we have a cash-based system. This has the benefit of simplicity, ease of comprehension and familiarity for stakeholders. At the same time, however, we are introducing a range of international public sector accounting standards, IPSAS, which will bring forward an amount of accruals information so we can have the best available information on both a cash and accruals basis. We hope to introduce the first nine of those standards in 2024.
The renaming of the Department to include "National Development Plan Delivery" in late 2022 has brought a greater emphasis on and mandate for the delivery of the national development plan, NDP. A series of actions and reforms were identified as priorities to improve the delivery of NDP projects and programmes and the Minister secured Government approval for that package in March 2023. It is important to emphasise that my Department is responsible for setting the overall multiannual capital expenditure ceilings for each ministerial Vote group, as set out in the NDP and Project Ireland 2040. It is also responsible for maintaining the national frameworks within which Departments operate to ensure appropriate accounting for and value for money in public expenditure, such as the public spending code and the public procurement policy.
The public spending code sets the value-for-money requirements and guidance for evaluating, planning and managing capital projects. The actual delivery of NDP projects and priorities continues to be the responsibility of the relevant Department and Minister with sectoral responsibility. They are also responsible for complying with the framework set up by my Department in terms of ensuring appropriate value for money and the appropriate use of public funds. The public spending code, as a tool, can help to ensure the projects can be set up for successful delivery.
Effectively, using the code provides for a sound approach to addressing issues that arise in project development in the right way and in a timely manner. It provides, through the life cycle changes, for opportunities to re-evaluate and update projects and, therefore, project agility can be provided so adjustments can be made to current conditions.
I thank the Chairman and committee members for their attention and I look forward to our discussion on the agenda items.
Good morning. To start with the issue of staff, Mr. Moloney mentioned recruitment challenges. What grades are we talking about, what is the complement of staff at the moment and what are the numbers the Department is funded for?
There is a table in the accounts concerning the remuneration of Accounting Officers. First, it would be useful if the Department could send us the 2023 amounts because there was a variation in 2022. For example, we had the Secretary General of the Department of Housing, Local Government and Heritage before the committee. The amount that is stated here is €225,000, whereas newspaper articles say it is €235,000. I am questioning whether that is the actual figure. The other issue is that a backdated amount was paid. Is that backdated amount stated in the current accounts?
Mr. Seamus McCarthy:
The figures the Deputy is quoting are from a briefing note that was prepared. It is not actually in the appropriation accounts of the Secretary General, but they are the figures for the actual remuneration paid in the year 2022. It is the cash amount. What may have been quoted in the newspapers is the current salary level, which, obviously, can change during the year. Therefore, the figures that are in the appropriation accounts are what was actually paid in the year rather than the rate at any point in time in the year. In the 2021 appropriation accounts, what was given was the salary rate at the end of 2021. It is now more consistent with what is generally provided in respect of other State bodies.
Okay, but there is a variety of different amounts. I want to focus in on one, which is the one in the Department of Health. I remember the discussions going on about Army pay and how we could not look at one group of people separately, yet that seems to happen when it comes to higher grades. Would the Department have been asked to approve a sizeable difference, for example, in respect of the Secretary General in the Department of Health or the Secretary General in the Department of Housing, Local Government and Heritage? Why are they taken out separately?
Mr. David Moloney:
It was a decision taken by the Government. The then Minister for Public Expenditure, National Development Plan Delivery and Reform spoke to committees about that at the time. What was felt was that there were specific requirements for the Secretary General of the Department of Health job that meant that a higher salary was desirable to offer.
Mr. David Moloney:
We have put in place a slightly different process for the Departments of Housing, Local Government and Heritage and Children, Equality, Disability, Integration and Youth more recently following the work of the independent review group.
In regard to public private partnership, PPP, projects in 2021 and 2022, housing, local government and heritage are included as bundle 1 and bundle 2, and there is an amount listed. Increasingly, we have been hearing about social housing becoming a product, which is very difficult to get your head around. I have certainly seen some local authorities opting for a long lease arrangement as opposed to building; they lease for 25 years, then there is a four-year review and the house goes back to the original owner after 25 years. Effectively, we are paying the mortgage on it for 25 years. Would that have been something the Department would consider or is it decided at the individual Department level?
I am struggling to identify the role of the Department of Public Expenditure, National Development Plan Delivery and Reform regarding value for money in things like this. I would have thought it would have something to say in respect of value for money.
Mr. David Moloney:
We have produced analyses in regard to the relative value for money of different types of housing provision which suggest that, in some parts of the country, different types of provision are more cost-effective than others. It depends on whether it is urban or rural and what stock is available.
I take issue with some of that. I am seeing this in my area. It emerged last week that not one social house was directly built in my area last year. The output in Kildare is actually very high but it is all turnkey and long lease. I fail to see where the value for money is in that.
To move on to the public spending code, for example, the process has been changed from a five-stage process to a three-stage process. I am thinking, for example, about project relating to the new national maternity hospital and the review. Has that review happened at this stage? There is an external assurance process. Is that under way?
Mr. Kevin Meaney:
For the national maternity hospital project, the business case was received earlier this year, in 2023, and it has been assessed under the external assurance process that we put in place. Following that, it was assessed by our major projects advisory group, which is essentially a group of experts on infrastructure delivery.
Would that include a figure? Originally, we were told that the estimate was €350 million and figures of up to €1 billion have been talked about.
The national paediatric hospital is routinely discussed here. We have to learn lessons. How firm is the process?
Mr. Kevin Meaney:
It is up to our colleagues in the Department of Health and the HSE to ascertain that. I suppose there might be some commercial sensitivities. Having had Government approval, they are now entering the tender process. It is up to them to manage the sector. As part of the tender process, maybe they have not necessarily released the figure just yet.
When it comes to the public spending code, I am just trying to see whether there are blockages to successful delivery. There is a practical example in my constituency. The OPW negotiated a deal for the purchase of land at Castletown House in 2021. It told us that the cost would be somewhere in the region of €5 million. Essentially, there was either a blockage in the Department of Public Expenditure, National Development Plan Delivery and Reform or that Department stopped the sale. The land was strategically important because of vehicular access. The land was subsequently sold on the open market in a closed bidding process and bought by a new landowner. He has very different ideas about the historically important land associated with Castletown House, which attracts 1 million visitors per year. The new owner is reported to have said that if the land is to go up for sale – he is not offering it – the figure involved would be multiples of €5 million. I am just using this as an example. Are there projects that have not happened as a consequence of a very protracted process similar to the one I have mentioned?
Mr. David Moloney:
One-off purchases of land are slightly different. They are covered by a different circular. They require an economic appraisal and evaluation and an estimate of the value of the lands involved. In 2021, the estimate of the value of the lands provided by the OPW was significantly below the values sought at the time. In 2022, a revised estimate was provided. A strong business case was provided and sanction was given to the OPW for the full amount it requested. Unfortunately, it was not successful and there was another purchaser. I understand the OPW has been having discussions with the purchaser. Inevitably, there is a need to challenge, specify and justify value for money at the initial stage of a project. One-off purchases of land and buildings, in particular, have been challenging over time.
I am just using it as an example. I have no doubt that there is a need for a rigorous assessment; however, by virtue of the fact that the land was not purchased by the OPW, it will now cost a lot more, even in terms of access. I am just using this as an example. Are there blockages that cause a problem in terms of value for money?
Mr. David Moloney:
In our view, an appropriate public spending code, albeit one that does not place an undue administrative burden, makes projects better. That is one of the things PwC recommended following its review of the national children's hospital project. The IMF, on foot of its examination of capital, has indicated to us that a well-specified project will get delivered better, quicker and more on budget.
Mr. David Moloney:
I do not have visibility of the full range of projects under the national development plan, but I am not aware of very many that have been cancelled. In effect, inflation at the same time as labour-supply and supply-chain shortages is placing great pressure on the industry. What we have seen are extensions of project timelines and rising costs. We have made changes to our public works contract to try to ensure a fair balance between contractors and the taxpayer in terms of being more flexible around price changes, but it is a full-employment industry and there are skills shortages. These factors have had an impact on the timelines of projects.
I welcome everyone this morning. I want to follow on from Deputy Catherine Murphy's comments on the public spending code. How this instrument has been used to any effect when it comes to projects has long been of interest to me. My understanding of the public spending code, which is that of the majority of politicians, is that it exists as a safeguard to prevent projects from going into over-expenditure and to assess the potential risk of such an occurrence. However, that has to be balanced by considering whether it really worth going through a process that takes a certain amount of time. On average, how much time is required for a major capital project, such as a major hospital development, an extension to a public building, a new road project or a public transport project, on which we will see an awful lot more expenditure in the future? How cumbersome is the process in that regard? Did any issues arise in 2022 or even previously in respect of which the instrument was effectively used to stall a project until further examination? Given the rapid inflation that we have experienced, which has wiped away the capacity we would have had some years ago to get projects over the line, worth billions of euro, is the system fit for purpose? The Minister for Public Expenditure, National Development Plan Delivery and Reform, Deputy Donohoe, has committed to significant work on this, but I just want to get an insight into what happened in the past and how genuinely effective the code has been since it was put in place.
Mr. David Moloney:
There is always a balance to be struck between the amount of regulation or conditions we apply to ensure value for money in advance and the proportionality of particular projects. What we say about the national development plan is that most projects are delivered on budget and on time, but there are genuine challenges with bigger and more complex projects. They relate not only to the public spending code but also to the planning process. The Deputy's point on the public spending code-----
I hate to be awkward but that is what interests me. I regard the public spending code – tell me if I am wrong – as entailing a six-, 12- or 18-month process in which Mr. Moloney's Department effectively analyses paperwork submitted to it, to put it politely. In other words, there is a very intensive process to determine whether the project is worth funding. I see it as an instrument of delay.
Mr. David Moloney:
When a business case comes into my Department – Mr. Meaney can give the timelines for particular projects – we are in a position to turn it around using the major projects advisory group within six to eight weeks, in the main. People point to the public spending code quite often as the cause of delay but sometimes it is simply the case that part of a planning or evaluation process has to take place. There can be other regulatory approvals needed------
I am interested there because the most costly one there by some degree is MetroLink. How long will that process for the analysis of a project take? I believe €22 billion was the last estimate I saw in the paper.
Mr. Kevin Meaney:
On average, all of the rest of the projects would take six weeks, but we took about eight weeks with that one. We needed that little bit of extra time where there was a great deal more paperwork but eight weeks was the turnaround time between receiving it and getting it back to the Department of Transport. That would be it.
Retrospectively and for the future, we have this constant issue in Ireland when it comes to large scale capital projects which is true with health projects, and it will be very much the case in transport because of the decarbonisation of the economy, where we will have an increase in rail projects, which is to be expected. One is looking at light rail systems being put into places like Cork and other projects, which will take a significant amount of funding. Even in my own area, the Cork metropolitan area transport strategy, CMATS, is a €4.5 billion plan, albeit some of it will be backed by European funding. My point is that when it comes to our ability to identify these capital projects, implement them and construct what needs to be done, we are very bad at that in Ireland. Kicking the can down the road leads to increased costs. As part of that review process within the public spending code, I ask Mr Moloney whether anything is being done to improve our capacity to deliver on capital infrastructure projects and to look at the areas of cost-cutting.
Mr. David Moloney:
Absolutely. We indicated earlier in the year that we are reviewing the public spending code and we are replacing it with a set of infrastructure guidelines to simplify the code, to reduce the number of decision stages in it to three stages. We hope that from the point of view of the regulatory burden the code imposes, that this will strike a proportionate balance between the need to ensure value for money and the need not to block or slow down projects. I point to the MetroLink as a good example, where in the business case for the MetroLink; our piece of that is the easiest piece in many ways. It is an enormously complicated business case to pull together so the Department of Transport would have spent a great deal of time pulling that together. All of the evidence that we can see internationally and what the International Monetary Fund, IMF, tells us is that a properly scoped and specified project has a greater chance of succeeding in a timely way and in a budget sense. It is that balance between the investment that is needed in that piece and a sense of proportionality. That is what we are going to do with the public spending code, for example, with regard to the requirements for the threshold for the more detailed analysis, which has been raised from €100 million to €200 million per project.
We are conscious of the need not to get in the way and to support delivery and we have taken steps in order to do that.
With regard to the national development plan, which falls under the responsibility of this Department, we had €174 billion of a plan put in place and it was one of the first items that was looked at under the programme for Government but the inflation costs have had a very significant impact on that. With regard to the projects across the entirety of the document, where transport is of particular interest with regard to the capital projects contained within it; has a list been devised within the Department as to which ones will be given priority in terms of whatever funding is available or is analysis being done on that document, which was signed off in 2021, on what additional parcel of funding will be required for it to be implemented in time?
Mr. David Moloney:
I have a couple of things to say about that. First, for transport or any particular sectoral Department. the Department and the Minister, him or herself, decide on the priorities within the envelope.
Within the overall context of ourselves, we will be reviewing the national development plan in the first quarter of next year where the Government in the summer economic statement has made an extra €2.25 billion available in respect of windfall capital gains. We will be looking at those issues and have asked the Economic and Social Research Institute, ESRI, to provide us with an analysis of the potential for capital investment to be availed of by us.
I am not trying to catch Mr. Moloney out and if that is something he could come back to me on, I would appreciate it because I believe it is very important. Obviously, we had a parcel of €174 billion in planned expenditure under 2021 figures. I want to establish how much that figure would be now with regard to today’s new economic reality, in the way that inflation took place.
I want to touch on consultancy fees, particularly for State bodies. There are numerous State bodies which are hiding their consultancy fees from both ourselves here on the Committee of Public Accounts and from the public in their accounts. This is an attempt to avoid publishing the full costs they pay on consultancy fees. They are hiding those costs in business as usual outsourcing in their accounts, and this section then contains scant detail.
I will give the committee some examples. Transport Infrastructure Ireland, TII, reported €2.1 million in consultancy fees in 2022 and this information was gained through a freedom of information, FOI, request. It was revealed that there were €86.1 million in business as usual outsourcing.
The National Asset Management Agency, NAMA, reported €281,000 in consultancy fees in 2022 and €12.7 million was the FOI figure which, again, was hidden in the business as usual outsourcing.
The Office of Public Works, OPW, reported €9.1 million, but the hidden figure was actually double that where it was €18.2 million. Is the Department of Public Expenditure, National Development Plan Delivery and Reform aware that many of the State bodies are publicly underdeclaring their consultancy costs? It appears that the behaviour is widespread and it makes our job far more difficult. One cannot have accountability if one does not have transparency. Is the Department aware that this practice has been going on?
Mr. David Moloney:
I suppose that this issue is probably around definitions and how common definitions are. Were I to hire PwC to do a job, then that would be shown in my account as a consultancy. On the other hand, if I were to oversee a capital project and the people delivering that capital project were to take on consultants of various types, some of them would be the type of consultancy we would normally understand as administrative management advisory but some of them might be engineering or relevant to the-----
I am talking about the accounts, the Committee of Public Accounts, and, indeed, the public. If these are consultancy fees, then they are consultancy fees, regardless of the nature of the consultant or the consultancy. In the accounts of these bodies which are published, the vast majority of the moneys spent on this is being buried. That is not being transparent, is it? Is Mr. Moloney saying he is not overly concerned about it?
TII has published its accounts, which show a figure of €2.1 million under the heading of consultancy fees, yet under the business as usual outsourcing heading, there is a figure of €86.1 million. That is an astronomical difference. It is an astronomical consultancy fee. What a difference? That is not being transparent. How can the Committee of Public Accounts hold State bodies to account if we do not get accurate and transparent accounts? If the Department is not too bothered about that either, where will change come from?
Would Mr. Moloney be kind enough to get back to the committee with a detailed analysis of what is going on and whether change will be brought about so that we can do our job properly, and also provide information on what format the proposed change will take?
In July 2022, six Spanish construction firms were fined over €200 million by the Spanish regulator for colluding on bids for public-private contracts. Spain has now banned those companies from winning public contracts for the foreseeable future. Is it correct that five of those Spanish companies have won PPP contracts in Ireland?
Mr. David Moloney:
Following that, we asked the National Development Finance Agency, NDFA, to examine the issue and report back to us. The NDFA has told us that the case against the Spanish companies is under appeal and that at least one of the companies has been granted a stay of the resolution which suspends the administrative sanctions that were initially imposed. Because the directive, or regulations, only allow us to consider excluding bidders under certain criteria, we actually have to see that resolution being finalised before we consider excluding them. The NDFA is working with the tenderers, the people putting projects out to tender, in order to work through those issues. Under the legislation, it is quite restrictive.
A final decision has not been made but there was a finding and the companies have been fined €200 million. Is Mr. Moloney concerned that such companies are applying for PPP contracts in this State and about the problems that would arise? Was there an investigation into contracts that these companies had applied for? At the time, it was said these companies had colluded and met on a weekly basis to discuss their plans, supplied each other with technical drawings, etc., and that all of them, bar one, would withdraw at the last minute. Did the Department investigate if there were similar cases involving that activity in any of the contracts? One of these companies is a consortium partner of the main company developing the national children's hospital.
Mr. David Moloney:
Once the matter was raised, we talked to the NDFA, which has kept the matter under review. The NDFA has examined the status of the companies, followed through on the issue and examined what is there. Again, an aspect of the regulation is that one has to take into account any remediation that the company has put in place. At the moment, the NDFA's advice to us is that no final conviction has taken place and the companies have put in place remediation.
I understand that but I am asking whether there were similarities here with what happened in Spain, where several companies were involved in a contract and then all of them, bar one, withdrew and the company that was left was awarded the contract. When the Department investigated, did similar circumstances arise in any of the contracts awarded?
I thank the witnesses for being here and for all the work they are doing. Mr. Moloney, in the last paragraph of his opening statement, stated:
The public spending code, as a tool, can help to ensure the projects can be set up for successful delivery. Effectively, using the code provides for a sound approach to addressing issues that arise in project development in the right way and in a timely manner.
On average, it takes ten to 12 years to complete flood relief projects. That is how long it takes to go from the time it is decided to do a flood relief project to getting it all the way through. I know the OPW is involved in the process. We have had major flooding issues in recent weeks in a number of areas of the country. The current process is no longer adequate. What can we do to deal with the issue?
Mr. David Moloney:
Where projects have been proposed, they are frequently subjected to judicial review. It has been very challenging to gain acceptance of flood relief projects. The Minister is responsible for a consent process in relation to those projects delivered by the OPW under the Arterial Drainage Acts, which are not the majority of flood relief projects. A lot of projects are dealt with at a local level through local authorities. Certainly, in terms of the projects that we have direct visibility on, those that come under the Arterial Drainage Act, there are considerable challenges in creating, designing, consulting on and gaining acceptance of the schemes.
Does Mr. Moloney accept that what is going on is no longer acceptable? The timescale is just not workable. The population of this country has increased by 40% in the past 23 years, a lot of building has occurred and industrial estates, housing estates and new roads have been developed. However, we are unable to deal with flooding. It now costs the State more because we are now paying out money to people who have suffered damage as a result of flooding. If we are talking about public expenditure and watching how we spend that money, the State must expedite the process.
Mr. Moloney talks about making best efforts. I will mention one project. My office is in Blackpool in Cork North Central. There was major flooding in 2010, 2012 and 2013.
There was a plan set out by the OPW. Following judicial review it ends up back in the Department. My understanding is that the Department of Public Expenditure, National Development Plan Delivery and Reform, has sat on that file for 15 months. As a result, all the environmental studies done are out of date and have to be redone. Am I correct?
However, they gave a report which is sitting in Mr. Moloney's Department, and as a result, we are now gone back to a stage where we have to do all of the environmental impact studies again, which will delay the project for anything up to two years. Am I correct?
Hold on a second. I put down three parliamentary questions in the past 12 months and each reply I got was that this was going for further public consultation. I am now being advised that it cannot go for public consultation. Is it not the case now that money will be wasted because reports are out of date and we have to go back, whereas the Department is supposed to be controlling public expenditure?
But that is 15 or 18 months ago. We need a decision. This is about the whole process at which we now need to look as regards why it sat in Mr. Moloney's Department for 15 months. In fact, while this information was given to me last week, I understand the Department with responsibility for the OPW has still not been notified what the Department of Public Expenditure, National Development Plan Delivery and Reform, is looking for.
This goes back to the overall issue I am raising about projects, which are now urgent - not just in Blackpool but right across the country - where we seem to have a process that goes on ad infinitum. It is ten or 12 years later and now we have a situation where over €500 million will be paid out this year as a result of people suffering damage to properties and loses. There is a need now for the Department to see how we can expedite the process and deal with it in a far more timely manner.
Mr. David Moloney:
Absolutely. We will look at that and we will see. I know because I have already tried to look at it and to see if there are things we can do to accelerate it. The process is very complex involving national and EU law. There are requirements that have to be met. Once a project is judicially reviewed, it starts the cycle again. It is unsatisfactory, and to the extend to which we can improve our input to that, we are absolutely prepared to do so.
Of all of the projects we currently have, how many of them will get done and completed? In fairness to the OPW, when it does a project, such as those in Clonmel, Mallow and Bandon, and completes them, they have all been successful, but surely we can now fast-track this process in order to prevent damage being caused and that people can continue to live in their houses. I was in one house recently which had been lived in for 40 years and it had never been flooded. In the last flooding incidence in the Glanmire area, they had two feet of water in the house. This is changing every week. We need to fast-track this process and I am saying that Mr. Moloney's Department needs to look at the current procedures. I fully accept that public expenditure needs to be minded but in this case, for instance in Blackpool, it now means the Department has cost the taxpayer additional money.
Mr. David Moloney:
No delays in respect of these flooding projects are caused by a lack of funding. The procedures are, by and large, set out in EU and national legislation that we have to comply with. They involve extensive public consultation and extensive opportunity for people to take judicial reviews. I agree it is complex. Certainly, if there is a perception of any delay in my Department, I am very happy to look at that.
However, there is also a provision in the planning Acts where it is necessary to take action in order to prevent an adverse outcome. Is there not also a provision within the current planning legislation which allows the Department to use that? We have used that previously.
Is it not time to look at that to see how we can help businesses and property owners and how we can prevent this? We are very lucky that no loss of life occurred in some of these incidents. We have been very lucky. We now need to make sure we protect and use the current legislation to deliver the required changes.
I apologise if there is any overlap in my questions; I had to miss Deputy Burke's contribution. I am going to dwell on the idea of the public sector spending codes a bit, for me to be clear in my own mind. There is a 2013 document, a substantial revision in 2019, and then this updated circular in 2023. I have all the parts. I will quote from the national development plan, NDP, from a section on the climate environmental assessment of the NDP review:
It should also be noted that many of the measures included in the NDP Review are under development and all measures will still be subject to the full rigour of the Public Spending Code. This requires, amongst other matters, a detailed quantitative assessment of the specific impact on greenhouse gas emissions a measure will have.
I have not seen any mention at all of the impact of greenhouse gas emissions in any of those three documents. That is why I was asking whether I was missing a piece of the jigsaw. It the public spending code entirely silent on the issue of climate emissions? Is that not part of the review process at all?
Mr. David Moloney:
I will ask Mr. Meaney to answer that. Certainly, in the NDP review, we looked through some of the projects with a climate lens. When we are thinking about value for money, we think about adopting, in public works contracts and other things, a whole lifecycle approach which takes into account carbon emissions. Therefore, certainly within our general process------
Mr. Kevin Meaney:
There is an additional document of considerable length within the code, which goes into a lot of technical parameters particularly around economic appraisal around carbon emissions and how to value those. Our key metric is called the shadow price of carbon. All large infrastructure projects, when carrying out an economic assessment, should include the shadow price of carbon, which is based on the embodied carbon within the piece of infrastructure that is being planned.
If Mr. Meaney says it is in the detailed technical documentation, why is it not front and centre? There was this high-level review among secretary generals in key capital spending Departments in April 2022, which led to this updated circular in 2023, and six key principles are referenced there. I contrast that to the national investment framework for transport in Ireland, NIFTI, for example.
That puts the climate Act and the climate action plan front and centre. I carried out a word search on the NIFTI document. The word "climate" features 72 times, yet I did a similar search on these three documents and there is nothing. This is the key spending gateway. It is really where the rubber meets the road. This circular was sent around earlier this year but I do not see the climate Act or the climate action plan referenced anywhere. Will Mr. Meaney explain that?
Mr. Kevin Meaney:
On the new guidelines being produced for the public spending code, it is planned to be called the infrastructure guidelines and that is due to be published very shortly. There is going to be a specific consideration of climate and climate impacts very much at an earlier stage in the project life cycle. It is not another process. In terms of the technical material and the focus all Departments should have, however, there will be a greater focus at an early stage around climate impacts and, as the Deputy said-----
This high-level review among the Secretaries General happened in April 2022. The climate Act was in place at that stage. There have been several climate action plans. Why am I not seeing climate in the key principles if this next piece of work is right there? When is this going to land?
Mr. Kevin Meaney:
The work was already ongoing. We had colleagues from the OECD supporting on that and looking at international best practice, and the work was ongoing at that point. The review by the Secretaries General was very around some of the early dialogue on that balance between what is a robust, sensible consideration at an early stage weighed against the need to deliver some vital projects. The climate work was ongoing. In terms the shadow price of carbon, one of the rationales for why a lot of the technical material is on the side is that targets are changing quite regularly and we are regularly updating the issues based on the up-to-date targets-----
I am hearing an awful lot of jargon. I am aware of the shadow price of carbon. Let us not have smoke and mirrors on this. This is a key document on how we direct and spend public money for the public good, but at the moment it is entirely silent on climate and the life-cycle emissions impact. Deputy O'Connor referred to metro north. That is key infrastructure that should, in the longer term, have a positive contribution to make in driving down our emissions, and it should be a key consideration in process. It would feature in the NIFTI, but I am seeing it nowhere at all in the public spending code. When are we going to get concrete guidelines with respect to the public expenditure of money on huge projects that pays attention to the climate Act? What is the timeline?
I might put a couple of questions on the chief information officer to move to a different subject. We were all very worried and affected by the HSE briefing that happened, and I wanted an overview of what kind of investment we are putting in subsequently. I know it is sometimes a case of closing the door after the horse has bolted, but what kind of investment are we now putting in to support the work of the chief information officer? What kind of overview do we have of the type of cybersecurity incidents that have occurred in the past 12 months? Are we putting enough investment in there and have we invested enough to remediate the breach that happened within the HSE?
Mr. David Moloney:
We have continued to invest and the Office of the Government Chief Information Officer, OGCIO, has continued to focus on issues relating to cybersecurity. Of course, the National Cyber Security Centre has the primary policy responsibility for that. Each sector provides for its funding and arrangements in respect of cybersecurity but they do that with the assistance of the chief information officer and the National Cyber Security Centre. I think it is fair to say that right across the public service, since the HSE cyberattack in particular and the damage that was done, there is a renewed focus and concern around protection at various levels, so that is something we prioritise, are very aware of and fund directly through the OGCIO but also within the departmental ceilings.
Turning to the gender pay gap information, the Department would have a strong role in how other Departments report on their expenditure. This committee previously recommended that gender pay gap information be included but the Department is doing it differently, publishing the information mid-year and not in the appropriation accounts. Is there a reason gender pay gap information is not included in note 5?
Mr. David Moloney:
The appropriation accounts land quite a bit after the end of the year and we are inclined, with information such as that relating to the gender pay gap and to some extent with EU funding, which was another request for the appropriation account, to publish that more quickly and get it out closer to the end of the year to which it applies.
I welcome the witnesses. It is good to engage with them again. There are a number of items they have highlighted and about which the committee has asked to speak to them, and in my limited time I would like to focus on the appropriation accounts, specifically Vote 11. In note 6.2, there is a heading on EU funding and it goes on to outline the outturn for 2022 against the Estimate. Within that, there are structural funds, technical assistance and other costs, and special EU programmes bodies North and South programmes, about which I will ask in a moment. Does that heading detail infrastructure as well or is it purely programmes that are part-funded or contributed towards, such as EU programmes?
Fair enough. That is fine.
In appendices A5 and A6, there are technical assistance costs for the regional assemblies and, below that, the special EU programmes body North and South programmes, both of which have underspent. Looking around at the members of this committee, I think we all spent time on local authorities prior to coming to the Oireachtas. For the regional assemblies, the cost is not actually that large given their role, but I think their role is becoming more important now. Is the engagement from the Department purely a funding one? Does it have engagement directly with the regional assemblies or does that go through the Department of Housing, Local Government and Heritage?
Keeping with the programmes that are under the Department's remit, Mr. Moloney also highlighted the Ireland-United States educational fund. Is this purely funding that the Department contributes or is it involved in it as well? If so, how?
I thank Mr. Moloney for that.
On Vote 39, the Government procurement section, I was taken with note 6 in the context of compensation and legal costs. Mr. Moloney outlines a number of cases in that, some of which the Department was successful in. I note that one of them was with the Court of Appeal in June 2022. Mr. Moloney goes on to outline the second case. Could Mr. Moloney provide as much information as he can in respect of those two, particularly as they warranted a note in the appropriation account? Mr. Moloney might outline the extent of those cases.
Mr. David Moloney:
They are ongoing. They warrant a note in the accounts partly because of the costs associated with them. One was successful, but the costs then were apportioned in accordance with the advice we got through the State Claims Agency. Nearly all the cases relate to particular contracts for interpretation services. That is the broad area those cases are in.
I mention this because I dealt with the Department when it came before the Committee of Public Accounts previously in respect of the relocation of Garda headquarters, if Mr. Moloney recalls, from Harcourt Street to its new premises. There was a lot of toing and froing, let me put it that way, in terms of trying to have the proper fit-out for the new headquarters, the contracts, etc. Where does that stand at present? Is that all resolved now, satisfactorily? Mr. Moloney might provide an update on that.
Deputy Ó Cathasaigh asked about the chief information officer. Obviously, there is a lot of interest in that from this committee. We have engaged with the HSE and other agencies. Has Mr. Moloney a figure of how many cybersecurity incidents there have been over the past 12 months?
This is something that we have engaged on quite extensively over the past number of years. We are very conscious of the need to recruit and fulfil all those necessary roles in the public sector.
I refer to the Data Governance Board, under note 6, in Vote 43. Mr. Moloney highlights that it was established under the Data Sharing and Governance Act 2019. Is that board fully functioning, up and running, and resourced?
Mr. David Moloney:
Absolutely, it is up and running. It has agreed a number of data sharing agreements. If memory serves me, there are 20 data-sharing agreements which benefit 55 public service bodies. It is up and running. It is allowing data to be linked, by agreement, between public service bodies.
Mr. David Moloney:
There are relatively few secondments from the Civil Service to private companies. There are some secondments from private companies into Departments of State. I suppose that allows us to access a slightly different way of looking at things and a slightly different element of expertise in particular areas. I suppose it is the learning from that. It has probably become less common than it was ten or 15 years ago.
We know that, for example, there are at least four within the Department of Finance. The Department had six over the past number of years. It would be useful if Mr. Moloney could furnish a note in terms of secondments, particularly from PwC, within all State Departments over the past ten years. If that could be furnished, obviously, not today but at some point.
Is Mr. Moloney aware of the situation regarding PwC in Australia whereby the Australian treasury has referred PwC to the Australian Federal Police for criminal investigation for improper use of confidential state information. Some 338 staff-----
Given the awareness of what is going on in Australia with regard to that company, have reviews been carried out in respect of the work of that company or any company that had secondments to any Departments here? Given the serious issues that emerged there in terms of the alleged leaking of confidential information, could a situation like that arise in the Irish context?
Mr. David Moloney:
Malfeasance can happen. We are aware of the potential for that. In respect of the specific issue, the OGP has established contact with the Irish part of the global operation, which is, of course, a separate legal entity. It has established contact and is following up on that to be reassured that this is not a feature of the culture or practice.
There has been no formal review. We do not know whether the same situation has happened or is happening here. Mr. Moloney is saying it should not happen but there has been no formal review or analysis carried out.
Mr. David Moloney:
There are criminal issues that are reviewed by the policing authorities. We are aware of the need to preserve confidentiality. We hope we would become aware of any potential abuse in that regard. We do not have capacity to investigate what goes on within a private company, however.
I will move on from that but it is concerning. Further and deeper analysis is required in the context of secondments and what has come to light in Australia.
I will go back to an issue raised earlier by my colleague, Deputy Munster, namely, that of cartels, the six Spanish companies and the risks they pose. Mr. Moloney will be aware of recent commentary from Brian McHugh, chairperson of the Competition and Consumer Protection Commission, CCPC. He spoke on cartels and cartel behaviour, bid-rigging and such competition breaches. He stated the obvious, in that cartel behaviour is a crime. He talked about potential loss through cartel behaviour being substantial. He stated that a cartel based on the ones being found tend to increase prices by 20% to 30%. As public procurement in this State accounts for €20 billion to €30 billion a year, that is a potential increase of approximately €6 billion per year, according to the figures given by the chair of the CCPC. Are those figures accurate? Does Mr. Moloney concur with what Mr. McHugh had to say?
Mr. David Moloney:
I have not seen the comments but I have heard reference to them. The CCPC is the statutory body responsible and would have a view and insight into the potential. From our point of view, we take the potential for bid-rigging very seriously. It goes against competition law. The procurement guidelines for goods and services are devised such that where a contracting authority suspects bid-rigging or collusive behaviour, it reports that to the CCPC. We are clear on that. It is a risk of which we are very conscious and we would ask contracting authorities to be very conscious in conducting tenders because, of course, it would drive up prices.
Mr. Moloney stated that there is a process regarding those five Spanish companies that have very large and lucrative contracts within the State. I am conscious that there is a legal process around all that as well. As regards the Department's collaboration with the CCPC on cases that have been successful in the context of breaches of competition law, does Mr. Moloney have details regarding the number of cases on which they have collaborated?
Mr. David Moloney:
Since its inception, the OGP has found no reason to report any tender or competition to the CCPC. Of course, in terms of the €24 billion, the contracting authorities are mostly outside the OGP. It is mostly the sectoral contracting authorities that would be involved in actually doing the tenders.
It is very much here in this State as well. It would be concerning that some of those major developers that have been banned in Spain are in operation here in Ireland. That practice in Spain was going back 25 years. There is a further need for deeper analysis to be carried out.
I welcome the witnesses who are joining us today and thank them for their opening statements. Last December, the Department of Public Expenditure, National Development Plan Delivery and Reform came before the Committee of Public Accounts and, at that session, one of Mr. Moloney's colleagues, Ms Marie Mulvihill, the principal officer over flood relief management, mentioned that the second public consultation on the Crossmolina flood relief scheme had concluded in July 2022 and that the report was with the Minister for his review and consent. That was in December 2022 but we are still no further on with the delivery of this project. My first question to Mr. Moloney, as Secretary General of the Department, is on concerns similar to those of Deputy Burke regarding delays in the delivery of flood relief schemes, especially the Crossmolina flood relief scheme. The residents of the community have been waiting for eight years and have been living in fear and anxiety as to when the next flood will happen. Will Mr. Moloney give us an update on this issue and on the ongoing delays in delivering this project that are apparent within his Department?
Mr. David Moloney:
On foot of a judicial review into the River Bride scheme, the Department sought legal advices on the wider process for assenting to arterial drainage schemes such as the River Deel scheme in Crossmolina.
In response to the advice received, the Department undertook an additional period of public consultation, which was a requirement, as well as instructing further examinations to be undertaken by the Department's consultants. Acting on the independent advice of the consultants, the Minister, who performs an independent, regulatory function in this regard based on expert advice received, sought supplementary information from the OPW in quarter 3 of this year. I absolutely accept that it is a slow and convoluted process but we are subject to national law, EU law and case law in this matter.
The issue is the timeline and sequence of events. The OPW went out to consultation twice. The file was then submitted to the Department of Public Expenditure, National Development Plan Delivery and Reform. I am not sure what happened in the intermediate period. We were informed that the environmental consultant the Department retained, Enviroguide Consulting, recommended seeking supplementary information. The expectation in December 2022 was that the file was going to the Minister's office. It was July 2023 before anyone was informed about the additional, supplementary ecological data that were required from the OPW. My question is really about the collaboration between the Department and the OPW. When I asked this question of representatives of the OPW, they were completely blindsided. What type of relationship does the Department have with the OPW?
Mr. David Moloney:
We have a very good relationship with the OPW. I emphasise again that in the discharge of his functions around flooding schemes under the Arterial Drainage Acts, the Minister has a regulatory function and must take a neutral view of the issues that arise. He does that primarily through taking on board the advice of appropriately qualified external consultants. I can see, for example, that the OPW would not have sight of the thinking behind our communications with the external consultants through the process. It cannot have such sight because of the independent regulatory nature of the Minister's role.
It is very apparent to Oireachtas Members that the role of the Department in issuing consent is taking far too long. The consultants it is retaining to perform this function are taking far too long. At the last hour, we are getting additional timelines and setbacks to delivery. Reform certainly is needed in this area. It is a year since the OPW finished its environmental submissions and met its obligation in that regard. We then had the Department seeking supplementary information. It is still unknown whether this has to go to a third public consultation, depending on the significant nature of the information that is being presented. How can we streamline the process and give assurance to the public and to the communities who desperately need these schemes?
Mr. David Moloney:
As I said to Deputy Burke, we accept that these things are taking too long and we understand how important they are to communities, but we have a whole range of national and EU laws to consider relating to the habitats directive, Natura 2000, etc. Exactly as Deputy Dillon says, we find that if there is any kind of gap or problem, whether in the form of a judicial review or a step that was not fully taken, or was seen by the courts not to have been fully taken, we go back into a loop of having to get into further examination, further data and further public consultation. I absolutely understand the frustration around that but some of those regulations are not within our control. We are happy to look at our role in that, which we do all the time, and the time we take to process things. We are always very happy to look at that with a view to making sure it takes as little time as possible. It is always put out to external consultants as part of an independent regulatory function.
We heard previously that the timeline for a response is six to eight weeks. Is that key performance indicator, KPI, being achieved in respect of flood relief schemes and, if not, why not? Is that area adequately resourced?
Mr. David Moloney:
Within the Department, we get the information on proposals from the OPW and we send it out to external consultants. That is what we have to do. To some extent, it is not that resource-intensive an exercise within the Department. We have adequate resources in place but the nature and complexity of the work that is then done by the external consultants involves an amount of time.
Will the Chair request a note on the live flood relief schemes that are with the Department at present, with a table showing the time it is taking for consultants to turn around packages once they have been submitted to the Department from the OPW? It would be helpful to scrutinise why it is taking so long in some instances, taking into consideration the need for additional information and for that information to be sent back. It would assists us in understanding the decision-making process.
We can look for that information across the various schemes. I have a scheme in my area, as I am sure everybody does in their area, that seems to be dragging out to eternity. It would be useful to see exactly what the timelines are and what the progress is on the various schemes. The Crossmolina scheme is of particular interest to the Deputy.
Yes. Leading into the winter and the more frequent occurrence of weather events, it is really important that people are best informed as to how these schemes will progress.
In the time remaining to me, I want to ask about public works contracts. I have engaged with many engineering companies in the sector that have concerns around the current state of public works contracts, with many describing them as not fit for purpose. I refer to local contracts. Concerns have been expressed by the Civil Engineering Contractors Association and the Construction Industry Federation around the specific steps the Office of Government Procurement, OGP, is taking to address flaws and limitations. Can Mr. Moloney provide detail on how the OGP is going to update its current public contract? Many companies cannot tender for the contracts because they are just not fit for purpose. Is any reform happening in this area?
Mr. David Moloney:
I can provide a note on that. A number of reforms have been introduced, such as the inflation co-operation agreement. The Deputy mentioned engineers. We have done some work on liability caps this year and we continue to examine the public works contract with a view to further improvements in response to concerns raised by the industry. I chair a construction sector group that includes representatives of the industry. We have an ongoing engagement with them about the public works contract and the balance of risk in that contract as between the person providing the service and the taxpayer.
Does Mr. Moloney see any issues in regard to the delivery of large-scale capital projects as we go forward, given the limited number of major contractors that can deliver projects at scale?
Is that something Mr. Moloney is concerned about in the context of the NDP?
I want to revert to the issue of consultancy fees for a few minutes. One of the standout ones is Transport Infrastructure Ireland, TII, with a reported €2.1 million in consultancy fees, and then through freedom of information we read that it is actually €86.1 million. I want to raise this with Mr. Moloney in a helpful way. When one sees a heading like business-as-usual outsourcing, and when one hears the term "business as usual" over the years at meetings or whatever else, it generally raises eyebrows. It is probably not the best description or term to be using but, in a helpful way, I will say this to Mr. Moloney. I will give him a few examples.
In 2021, TII gave Laois County Council - I am not trying to be parochial here; it is a concrete example of the type of absolute nonsense that is going on - €200,000 to install a footpath and some public lighting on the Cork Road in Durrow, County Laois. It was badly needed for new estates that needed to be serviced, and there was also a road safety issue with traffic calming to be installed. I raised it with the area engineer, who is highly qualified and very competent. He said that it may not be done, or it could be a year to two years before anything happens. I asked him why, given that we have the money. The county council got the money and left it to the competency of the engineer to deliver it within a year. Then it had to go out to consultants. I had a discussion with him. He is a very good engineer, by the way. I asked him why it had to go to consultants. He said TII insists on it. I look forward to seeing what the final bill is for the consultancy work on this project because involves a footpath going to the Sean Doire housing estate, and the new estate that is being built there as part of that, along with public lighting and a zebra crossing. This money comes from TII. The Department will ultimately sanction this, and it goes to TII. As sure as we are sitting here, I guarantee that this could take €50,000 or €60,000 of the cost. There are actually some jobs where the consultancy fees are more than the actual work done to deliver to the contracts.
I will give Mr. Moloney another example. Laois County Council wants to put in place a local bus service in Portlaoise, which is gridlocked. I think we have more people living there now than there are in Kilkenny city. Everything goes into the middle of the town. The local councillors and the council, all clever people, want to reduce car use in the town. Where I live on one side of town, it is 7 km to the other side, so there is a need for local bus service, and this has been identified. This would involve identifying the key population areas, where bus stops could be located easily, and routes. Lo and behold, TII is funding this, and it is out to public consultation, and there are consultants involved. For the life of me, why do consultants have to be brought in at every stage of this, to design the routes that are needed in the town? We have a road design section in the county council staffed by competent people. We have councillors who are elected, who know the area inside out. It would appear that to even hang a gate, there is an insistence from Government Departments about involving consultants. I am saying this to Mr. Moloney very directly because I do not expect him to know all the minutiae of what is happening. This is where the costs are piling up, and common sense is out the window. If a gate has to be hung, or two gate pillars put up, there are consultants brought in at every hand's turn. It is a huge industry.
Let me give Mr. Moloney another example, which is housing. We have the Department of Housing, Local Government and Heritage here regularly. It is back in again soon, and I will raise this every time the Secretary General comes in. About 20 years ago we decided that every local authority home was going to be architecturally designed externally, not internally by the council architects, engineers or technicians, which used to be the case - and by the way, they were easier to maintain. I am told by senior staff in various county councils that the cost of this work - the outside consultancy and the architectural work - is adding over 11% to the cost of housing. We are trying to keep down the cost of housing but those are three examples I can rattle off the top my head. It is absolute insanity what is going on. The first thing is to bring in consultants. I am not against bringing in expert advice but I can tell Mr. Moloney of occasions when we have had expert advice. One of them was the waste management plans back in the 2000s. Each county council was instructed to get involved in this and draw up waste management plans. There were eight regional plans, as I recall it, and they never went ahead but a consultancy firm got a pile of cash to go around. Deputy Murphy is in a different area from me, and she probably saw a copy-and-paste job of what I saw at the time for incinerators all over the country, among other things. It never happened, and should not have happened. It did not need to happen.
The point I am making to Mr. Moloney is that there is this absolute fix on bringing in consultants through everything. I ask Mr. Moloney if his Department will talk to some of the people in TII and some of the other Government bodies. He might like to respond to me by telling me why, in order to install a footpath and public lighting, a county council with a road design section, an area engineer, technicians, very good overseers and supervisors - all highly qualified people - would need consultants to design that? I have asked this question and I cannot get an answer to it. I want Mr. Moloney to give me an answer as head of the Department of Public Expenditure, National Development Plan Delivery and Reform.
Mr. David Moloney:
What I can do is I can follow through on the issues that the Chair has raised and report back to the committee on them. Obviously, in the first instance, there is the Accounting Officer for the Department itself but we can find out from TII what its response to the issues raised is. Clearly, we share a concern about that because we would not want consultancy costs driving up the price of projects, or of housing. We are very happy to follow through on that.
There is a huge overuse of it. As I said, I do not have any fix with regard to not bringing consultants or experts. It is appropriate at times. One has to do it, and I understand the logic of doing it. It is quite all right to do that. However, for minor projects, we are adding on. There is the issue of housing. I want to raise this directly with Mr. Moloney. We have a housing crisis in this country, and we insist on every scheme starting with a blank canvas. As Mr. Graham Doyle tells us each time he is in, which is fair enough, the Department of Housing, Local Government and Heritage is using certain standards with regard to internal design etc. If one wants to produce a lot of something, one has to mass-produce it. Again, I am not arguing that we should produce stuff that is not up to standard or that is in the style of the 1930s, 1950s or even the 1970s. Mr. Moloney is the head of the Department of Public Expenditure, National Development Plan Delivery and Reform. He will sign a big cheque this year for housing, and some of us would argue for an even bigger one. That is fine. However, why can we not have a situation where we try to get value out of what we are spending on homes that are built?
I estimate that we need about 12 different types of units because we have disabled people. We need four-bedroom houses, one-bedroom homes, apartments, high-density and lower-density, depending on where one is building.
I would contend that the only blank canvas there should be is the actual layout and design of the site, the entrance road and so on. Why are we starting with a blank canvas on every scheme? A lot of schools have been built in the recent past. Every one of them looks the same. Yet there are architects, consultants and design teams brought in which, in the case of the building programme between six and eight years ago did not seem to notice that the contractors were not putting in wall ties, even though they were supposedly in charge of monitoring what was happening on-site. Why are we not insisting on a clerk of works? I am saying that school buildings generally look the same. I am not saying every one of them is exactly the same. There are a few different types. Some of them have to be single storey, while some can be two storey. Why is there this insistence on going to a blank canvas every time?
I want a direct response on housing. As the Accounting Officer in the Department of Public Expenditure, National Development Plan Delivery and Reform, will Mr. Moloney tell me why we go to a blank canvas every time we want to design a housing development? What can we not have between eight and 12 designs and sizes, in order that we can do what we used to do and what they do in other countries? The private sector does this, by the way. The house I live in was built by a private developer. I have seen a lot of places around the country where the houses look the same as mine. I do not care. I have a comfortable home - a three-bedroom house. I am happy. Why can the State not do that?
Mr. David Moloney:
The Deputy mentioned the common design templates that the Department has developed for local authority housing. I think they will help with the exact issue he has raised. The introduction of modular construction is another thing that will help. To do modular construction properly we need scales. We need a certain amount of common design. We fully support that, and are involved in the roll-out and delivery of modern means of construction.
That is what I am asking. I have said it to the Minister, and I am saying it to Mr. Moloney. I have said it to the Secretary General of the Department, and I have said it to the previous Ministers. Local authorities built 1,666 homes last year. Four local authorities, including Kildare County Council, built none. If you are starting from scratch the whole time, there is a dead hand on it. People will refer to the 1970s. We were able to produce almost 8,000. There are different types of homes now, like A-rated homes, etc. However, A-rated homes have been built around the corner from me by the local authority. You could use that plan anywhere. I am sure whatever architect designed them would be happy enough to get a few bob - for the copyright, royalties, or whatever you like to call it - each time they are used, rather than starting from scratch again. I do not see why we are spending between 10% and 15% of that huge housing budget. It is going down the tubes through starting from scratch each time.
Will Mr. Moloney also ask Transport Infrastructure Ireland, TII, why it is insisting on consultants to design footpaths going to a housing estate? It is nuts. Will he come back to the committee with a note on it? I could go on about a range of other projects. The issue of flood relief has been mentioned. The only thing I want to say about the scheme in Mountmellick, County Laois, is that the concern is with the timeline and the risk of flooding. It comes down off the Slieve Bloom Mountains three or four hours after heavy rain starts. There was a preliminary budget of €3.2 million set out. That followed the bad flooding in late 2017. The concern now is, six years later, that it will cost more than that. I know the Department has to be careful about putting final figures on it because it goes out to contract and so on. Will Mr. Moloney ensure there is no hold-up in the timeline from his Department? Can I also have a guarantee that the additional funding for the Mountmellick scheme will be available when it comes? Will he come back with a note on both of those issues regarding Mountmellick? I accept that they have to go through the public consultation and there is a lot of work. I accept that consultants are needed to do studies and everything else to get it right. I am concerned with the timelines and that there is no hold-up with it, and that additional funding will be available when they are ready to go to construction.
In response to a parliamentary question last June, Mr. Moloney told me that PwC was paid just less than €250,000 for a review of the organisational culture, which I presume was of the Department of Public Expenditure, National Development Plan Delivery and Reform. What prompted that? Was it published, and did it examine the purpose of the Department?
Mr. David Moloney:
I suppose that was prompted by a discussion at the then management board, and a decision taken by the then Secretary General to undertake a culture review. It was seen as good practice ten years since the foundation of the Department to look at what we did, how we did it, and how people in the organisation felt about the culture. That was quite extensive
Mr. David Moloney:
It really looked at the culture and behaviours in the Department, more than the purpose of the Department. I think it would be fair to say that. We have since had an operating model review that I think has also been published, which spoke more to the way the Department was structured in order to deliver on its purpose.
Right, because you get the impression when the Minister comes in on budget day with the big budget book that this is a really important Department. Then, our engagement with it here, now and the last time is probably the most frustrating out of all the Departments. When you ask a question, you are invariably deflected to Departments like the Departments of Housing, Local Government and Heritage or Transport, rather than a Department with a responsibility. Long leases on housing, for example, which is part of Housing for All, falls under the Department of Housing, Local Government and Heritage. I would have thought the Department of Public Expenditure, National Development Plan Delivery and Reform would have gone to it and asked if it was off its rocker. Long leasing houses for 25 years is just about the most expensive way of delivering this. Does the Department have any weight to tell them not to do something, or to issue strong advisories not to do something if it will not produce value for money. Does the Department have that weight?
Mr. David Moloney:
The role and function of different Departments is obviously set out in legislation. The Department of Housing, Local Government and Heritage is responsible for housing. It has an Accounting Officer. We are responsible for the monitoring and oversight of public expenditure, and we engage across all Departments and areas of public spending-----
Engage is one thing. I am listening to Mr. Moloney's language. He used the word "desirable," which is a word I have known since I got involved in politics, and that is a long time going back to local government level. When people tell you something is desirable, it usually means they would like to do it, but it does not get done. There is almost a language you have to acquire. When he says "engage," what does that mean? Does the Department say something cannot be done as it will cost a fortune? Does it issue strong advisories? Does it have any power?
Mr. David Moloney:
For any policy proposal brought forward by any Minister in terms of a memo for Government there would be a consultation with the relevant spending team in my Department. They would agree and disagree with different proposals, and they would challenge different proposals. As I have said before, we have produced analysis on the relative merits of different types of housing provision. We advise the Minister on these memos from Government, and the Minister-----
One of my colleagues asked about the metro. The range was between €7 billion and €23 billion. How is a value for money analysis done on something like that? I asked about the national maternity hospital project. Was a range considered there, or is one being considered? I ask that because we keep being told we will learn lessons from the national paediatric hospital, the cost of which keeps on moving up. There were serious mistakes made with the tendering process and a lack of real rigour when it came to the tendering phase.
How does the Department evaluate something as being between €7 billion and €23 billion? Was there the same range in the case of the national maternity hospital?
Mr. Kevin Meaney:
Regarding the metro, there is a technique called “reference class forecasting”. Essentially, it involved benchmarking against other metros that had been built across the world. The exercise removed any unique features of those systems and tried to keep them as close as possible to an Irish-style plan. The model arrived at a central point estimate, which was between €9 billion and €9.5 billion. The range is provided as a probability based on what happened with some metros that were built in other countries. When we speak of €23 billion, we are speaking about the very worst-performing metro systems. However, the average and mean are closer to-----
How will our experience with the national children’s hospital be applied? We will start at one point and then probably be benchmarked in other jurisdictions. Presumably, the paediatric hospital will be benchmarked as the costliest such hospital.
Regarding the cost of the paediatric hospital, the committee was recently told that one third of the Department of Health’s entire capital budget would be taken up by that project. The more the hospital eats into the capital budget, the more other capital projects will presumably be scheduled differently, for example, paused. Is that how it will work? I asked about projects that had been stopped because of inflation. Can we also have a list of projects that have been paused so that we can have some idea of the situation?
Mr. Kevin Meaney:
The health budget is a matter for the Department of Health to decide on in the first instance. In the natural flow of projects and as they finalise, the costs in any annual budget become lower and what is essentially extra capital becomes available for other projects. Much of the national paediatric hospital is substantially complete and-----
I presume this will be the subject of the review of the NDP and that the Department will take account of the cost overrun. Will the Department know what that overrun is? I understand it has been-----
Mr. David Moloney:
We expect a memo on that in a relatively short time, so we may know then. Currently, the health capital programme is being underspent. Much of that could have to do with the timing of payments on big projects. We have provided €2.25 billion extra. The review will examine that and try to take into account different priorities and the impacts of what the Deputy mentioned, for example, inflation and so on.
I will briefly revert to the Castletown House issue. Did I pick Mr. Moloney up correctly that the OPW sought to purchase the house, held negotiations with the landowner and came to the Department of Public Expenditure, National Development Plan Delivery and Reform with an amount, but the Department said it would be too expensive? The OPW then undertook a business case, which it sent to the Department. Is that how it happened?
I believe subsequent events mean the house will ultimately cost more. It may not be possible to purchase the house at all, but there still has to be access. I will revert to the Department on this matter. A freedom of information request I have submitted is taking forever, but it will probably give me the answers I am seeking, including on the sequence of events.
Regarding flood relief, climate change is presenting us with a different scenario. I understand that there will have to be a change in how we do things, including flood relief and working with nature. Although changes are happening, people who have been flooded once will not get insurance a second time. Obviously, people in areas that are prone to flooding have to spend money if they want to stay in their homes or get businesses back up and running, and they will often get a grant from the Government to do so, but they worry about whether there will be another flood in three months’ time, next year, etc. There has to be a balance between cost and speed where flood relief systems are involved. Is the Department considering both sides of the equation? We could spend a great deal of public money getting people back up and running only to find we have to repeat the exercise multiple times before we have flood relief systems in place.
Mr. David Moloney:
We are considering that point. It is valid. We would like to see more flood relief systems in place. They are complex to establish. We are providing funding of €1.3 billion over the ten-year national development plan, and we will have to examine the matter during the NDP review to see whether that amount is enough. As the Deputy mentioned, the Departments of Enterprise, Trade and Employment and Social Protection have schemes for businesses and households. They are generally structured to be responsive and give an immediate payment and a later payment. However, the long-term answer is to provide appropriate flood relief schemes to protect households and businesses.
The main problem was getting insurance, particularly in areas that were geocoded using the flood maps. That problem has continued for premises within a certain distance of watercourses.
Even if there has not been a profile of flooding, we still see insurance companies that are hesitant, are reluctant or will not give flood relief. This is even after good and very expensive systems have been put in place.
I will go back to the issue of Blackpool, because I want to go through parliamentary questions that I tabled and where I was misled. The final section of a reply on 11 May 2023 to a parliamentary question stated:
It is my intention to open this period of public consultation during Q2 of this year and a notice outlining the details of this consultation will be made available on the Department's website in due course.
That was in May of this year. In the second quarter of this year that the public consultation was to take place. I refer also to a reply in June which stated that following the proceedings of the judicial review, “my Department sought supplementary information from the Office of Public Works in February 2022”. This goes back nearly two years. It further states:
The OPW submitted supplementary information to my Department in October 2022. This information can be found on the scheme website at floodinfo.ie.
The information that came back from the OPW was in October 2022. It has been 12 months since then and nothing has happened. To say that we are assessing projects within six to eight weeks, as was said in the opening part, does not stand up. It will now be two years before anything will be done. I need a detailed explanation. I went to businesspeople in May and assured them that there would be a public consultation, but it is now being made out that I have been telling them lies. It is unfair that the Department gave out this information in a parliamentary question. There are a number of parliamentary questions where I have been misled. I need an explanation as to why I was misled and why we are now back to square one.
Mr. David Moloney:
In relation to the first point, which was on the six-to-eight-week period, that specifically referred to the assessment of business cases by the Department in relation to projects under the public spending code. It did not refer to flood relief schemes, which exist under a separate set of complex legislation at EU and national level. Certainly, we will give the Deputy a comprehensive timeline. We have promised one to the committee in relation to each of the flood schemes. We are happy to-----
But it was October 2022 when that was supplied to the Department. It has been 12 months since then and there has still been no decision. That was October 2022. There are flood relief projects that need to be dealt with in a timely manner. Mr. Moloney said it already-----
Mr. David Moloney:
We are subject to layers of regulatory and legislative obligations at an EU and national level. We do not ourselves assess, under the Minister and his function as a regulator, but we ask external consultants to do it. As I said earlier, the timelines are not always within our gift. At all stages, we try to give as accurate a picture of where we are at-----
Mr. Moloney has to accept that there was a major mess-up in this project by his Department regarding the time delay as well as the fact that there are now businesses that cannot borrow money, let premises, develop premises or sell premises. This has now been going on for 13 years, while the Department sat on the vine. This is the real world we are now dealing with.
I ask for a process to be put in place to deal with this issue, not just for this project but for other flood relief projects. This is a matter of saving money for the State. We are now deciding - and rightly so - to give support to households and businesses that have suffered flood damage. This is going to continue and therefore this must now be a priority within the Department regarding how we can save money by reducing the flood risk and dealing with projects in a timely manner.
Is it now time to do a full comprehensive review to see how this can be done? Rather than saying what the Department is going to do, they should set out a clear plan of action in relation to all the flood relief projects that are currently with the OPW. How can we expedite them? How can we deliver? How can we make decisions so that real efficiency is displayed and so the people’s concerns are alleviated at a very early stage?
If the Department feels it cannot make decisions because of the restrictions of existing legislation, is it not time for the Department to come to the Minister and tell him that they need particular legislation to be amended to allow them to deal with these issues? We have used the planning Acts. For instance, we used different areas of legislation during Covid-19 because it was an emergency and we wanted to save lives. In fairness, all the Government Departments made sure that every possible step that could be taken was taken. We are now in the same situation in relation to flood relief work. This is not a project that we will be able to deal with ten years from now. Is it not time for the Department to review the current processes that are in place?
There was. There was a judicial review. The OPW set out its plan back in 2021. There was a judicial review. It is my understanding that the OPW withdrew the application on the basis that they conceded the judicial review issue. Then, it was referred back to the Department of Public Expenditure, National Development Plan Delivery and Reform regarding how it would be managed from then on. Then the Department corresponded with the OPW requesting further information in February 2022. That further information was provided to the Department in October 2022, according to the reply I have before me.
Does the Department have staff for this? From watching these assessments that are referred to external consultants going back and forward, the Department will have a fair idea of what the issues are. The staff in the various offices in the Department will be aware of them. Are there staff there that have competence in terms of carrying out those assessments in-house? That would speed up all of this.
I accept that; I just wanted to get a picture of what is involved. That is helpful. In terms of when it is being handed over to outside consultants for the assessment work, Mr. Moloney can see from what has been said that it is arising throughout the country. Deputy Colm Burke has a particular problem, literally on his own doorstep. Has a timeline been put on it when the consultants will be carrying out the assessment?
Mr. David Moloney:
It is the regulatory nature of the process in the sense that we establish a Chinese wall between ourselves, the OPW and the Minister and his other functions by saying "This is the proposal", and we give it to people who are experts in making the assessment. They make the assessment. We can discuss timelines with them. It just depends on the size and complexity of the scheme, etc.
Mr. Moloney knows what can happen if he hands something over to a consultant or a particular body to carry out work in respect of it and no timeline is put in place. I can think of situations where the management of one public body - not a local authority, but another public body - had to start asking for weekly reports from the consultants after two years in terms of the progress that was being made. This was because they twigged that no progress was being made.
Deputy Colm Burke raised a very frustrating problem. The Mountmellick scheme is obviously of major concern to me. Deputy Catherine Murphy and other Deputies are concerned. The Crossmolina scheme was referred to by Deputy Dillon. If something is handed over to outside consultants - I get the logic behind that, and Mr. Moloney has explained some of the competencies required - if a timeline is not put in place and if some kind of restrictions, for example, financial or whatever, are not put also put in place, they could drag it out forever and a day.
As a result of what is happening, two issues arise. One is the delay and the risk of further flooding in the case of those projects and across a range of other projects. There is also the issue of construction inflation, which is on a steep curve upwards. This is impacting on the public purse. On other projects, it is actually the delays in having the work done that is giving rise to flooding. Do we not need to do more than have a look at it?
Mr. Moloney and the Minister are in control of this. If work is being given to outside consultants and those consultants have to reach certain milestones, it focuses minds. If any of us take on something and we do not put in place a target date to finish, it can go on forever and a day. It can be put off continually. What I am saying is that there are escalating costs, but also, perhaps, escalating consultancy costs by not doing what I have outlined. There are three good reasons. I ask that the Department look more seriously at this and endeavour to ensure that timelines are put in place. I accept that the Department has to comply with the regulatory framework, environmental regulations and everything else, but I ask that the it try to at least ensure that some parameters are set down. If timelines are not set, the effects can be seen on the ground. Mr. Moloney is hearing about those this morning.
There is the cost element as well. I ask that would be done.
In terms of procurement, we have to take account of environmental issues when it comes to major public contracts. Has Mr. Moloney issued green procurement guidelines to all Departments in order that there will be a green element to procurement?
The Department would recognise the importance of social goods, social objectives, and environmental objectives in terms of big public contracts, and smaller ones. Obviously it is something the State has control over.
I know that. I raised with Mr. Moloney briefly before what is referred to as a community wealth building model. It is a model that is used in different parts of the world. Our two nearest neighbours use it - Scotland and England. North Ayrshire Council has developed a model, as has Preston City Council in the north of England. It is basically a model that is trying to ensure that some of the public spend is used in regions that are underdeveloped. We get this in every country, such as the east coast and west coast of Ireland, and it would be accepted that in the border region economic activity is not at the same level as what it is in other regions. Is the Department aware of the model or is it something the Department ever looks at in terms of public expenditure? How that could be utilised to feed into strengthening regional development, the local economy and local economic development. Is that ever looked at?
Mr. David Moloney:
We have a range of different ways in which we try to assess the impact of public expenditure, such well-being frameworks etc. The particular regional dimension is probably more a focus of the national development plan itself and the regional objectives therein. We certainly have that. I am not fully familiar with the model the Chair mentioned, but I can look it up.
Will Mr. Moloney look it up before he is next in? It is a model that is used in Ayrshire and Preston.
It is a good idea, regardless of where it is used. It is used in some of the states of America as well. The idea is to add to the overall economic well-being of a state by boosting economic development in particular areas that may be showing weakness in terms of economic activity and, as regards economic equality within local populations, putting in place certain standards, a focus on the environment and a strong focus on social objectives. I ask that the Department examine that model. It is a very simple one. I have looked at it and it has shown in both the cases I have outlined that it has strengthened local economies and shown benefits. It would not necessarily involve the Department of Public Expenditure, National Development Plan Delivery and Reform. Typically, some of the money would come from the equivalent of that Department, but some of it comes from local authorities and other public bodies. The Minister for Communities in the North - we do not have a Minister at the moment, unfortunately - published a report on this community wealth-building. It was done by an independent advisory panel. I refer the Department to that. It might be the most useful reference point. I ask that the document be examined. It was published by former Minister Deirdre Hargey's Department. That would be worthwhile. The Department has to do what it has to do, but it is just a suggestion to try to see if there is learning in it.
I appreciate the second round of questions. I want to touch on a matter Deputy Colm Burke raised. Deputy Dillon raised it with the witnesses as well. They will be aware that my constituency was absolutely annihilated by flooding and that the damage is extraordinary. The immediate estimate is, to our knowledge, €54 million for roads alone. Bringing the debate back to the OPW, very serious questions have been raised in Midleton about the pace of delivery of the flood relief scheme. In addition to Midleton, I want to raise with the witnesses Rathcormac. The flood defence schemes, as the witnesses will know, are done up in tranches. Deputy Burke made a very pertinent point in what he said. As to when we prioritise the expenditure on these projects, what is after occurring in my area is a very good indication of what the consequence is when that investment is not made immediately because the ramifications of such now mean that the costs for the taxpayer, the public, which, ultimately, nationwide, are very much involved in the financial ramifications of the flood damage, are in the high tens of millions. When one adds up the damage to over 350 homes in the area, the more than 200 businesses that have been damaged and the road infrastructure, bridges and other infrastructure that have been very heavily damaged, it is an eye-watering sum of money. Much of that could have been prevented, particularly in Midleton, if the flood defences were advanced. I will be very critical about the pace of delivery. These schemes have been the subject of public consultation since the middle of the last decade, yet today it is likely that the public will have to wait for a further four, five or six years, hopefully without any objections, for these schemes to advance. I know that is not within the remit Mr. Moloney's Department, but when it comes to the administration, the prioritisation and the funding of these projects, it does pertain to the Department of Public Expenditure, National Development Plan Delivery and Reform and the OPW, under its scope. I just wanted to make that point first.
I will ask a couple of questions. Would it be possible for the Department of Public Expenditure, National Development Plan Delivery and Reform to provide a report on where that scheme has been for the past number of years? This is my first opportunity to raise this with the Department since it happened. I would like to get a full briefing, if possible, on why, to this day, that flood scheme has not been advanced. Additionally, I want to ask about Rathcormac. The projects are in a second tranche but the village is flooded. Fourteen homes and businesses there were flooded. Is there any prioritisation mechanism available in the Department because of that? I want to let the witnesses come back on those points first, if that is okay.
Mr. David Moloney:
Certainly. As I said before, we absolutely appreciate the damage that is done by flooding and the need to put in place adequate flood defences. We have provided €1.3 billion in the ten-year NDP window for that, which may eventually not be enough, but I think the challenge now is actually delivering the schemes, getting the consents and planning permission and getting the schemes up and running. I am happy to get the Deputy a report on the schemes.
As regards our specific responsibility for schemes, we deal only with the ones that, in terms of the consent function, are done under the Arterial Drainage Acts. I think that sometimes that does not become apparent until the design phase is finished, whether it will be done under the Arterial Drainage Acts or otherwise. We will give the Deputy a full report on both the schemes he has mentioned.
I would really appreciate that. To be clear on the Midleton question, there is a question on the minds of many members of the public and on mine as a newly elected public representative. This is my first term in the Dáil. We had the Covid pandemic for two years of this term and, understandably, many projects were impacted in terms of the ability of the Civil Service to process them. That is the only defence against the level of delay involved, but this has been going on for so much longer than what I am referring to. There was minor flooding in Midleton around, I think, 2014 or 2015, if I recall correctly. I apologise - I should know that off the tip of my tongue. I was in secondary school when that last occurred so I apologise for my ignorance on that. The issue for the people there is that they cannot understand how it takes such a long time for that to occur. I would really appreciate it, on Midleton specifically, if Mr. Moloney's Department could request a report, an explanatory memorandum, to explain why it has taken such a long time. I appreciate that Secretaries General and officials come and go, but we are adamant to get that done as a matter of urgency.
I want to refer as well, with the Chair's consent, to the existing infrastructural issues there now as a consequence of the flooding. Riverbanks have been significantly damaged and the level of the riverbanks there has lowered significantly in locations where walls had collapsed. That is putting Midleton at very serious risk of this happening again. People may ask why this is relevant to the Committee of Public Accounts, but, ultimately, it comes back to the Red Cross scheme and other schemes that are now in place whereby taxpayers will have to spend somewhere south of €100 million and over €50 million on repairing the damage in my municipal district alone, one small parcel of the country. It is disturbing how much damage has been done by these freak weather events. We know they will occur more often. There is a lot to be said for having something like the US Federal Emergency Management Agency or other instruments whereby there is an instant pot of money available for local authorities to go in and do the necessary work. They are basically awaiting further financial support from the Department of Housing, Local Government and Heritage, then coming from Mr. Moloney's Department, which has to authorise it. I communicate that message to the witnesses on that front because it has to be done.
Mr. David Moloney:
I understand. There is an enthusiasm to make sure that the funding that is needed is available. The Deputy referred to the social welfare scheme for households and the enterprise scheme for businesses. They are structured to give some immediate help and then some further help when the detail of the cost becomes available. Similarly, the cost borne by local authorities and transport authorities has to be taken into account. I accept that completely.
Before we conclude, I will ask Mr. Moloney about the previous Secretary General, who intervened with the national broadband plan. He wrote a letter at the time to the Department about it. The letter subsequently came to the communications committee, of which I was the Vice Chair at the time. Among other things, he said that it was a major leap of faith and that the question of representing value for money arose. That was suggested in the letter, a two-page letter, as I recall. On the face of it, the Department of Public Expenditure and Reform was more or less ignored on that occasion.
In the context of fairly significant projects, would Mr. Moloney intervene or put his neck out by issuing that kind of criticism, warning or analysis? Would that happen regularly? Would he say to a Department, by letter or whatever, that something needs more careful consideration? The former Secretary General basically outlined serious concerns about it, as I recall, in that letter.
Regarding ones that are agreed at this stage, could Mr. Moloney give an example of one in the past two years where the Department made an intervention? I mean an intervention in the sense of saying there is a significant risk to the public finances from the project or perhaps the way it is being proposed is not a good idea.
Mr. David Moloney:
We would have been very engaged in discussions on MetroLink, which is a very large-scale project. We would have given views on that over the years and on the depth of the business case needed. At one point that would have been seen as delaying the project but what it did was give rise to a very comprehensive business case that very clearly articulated the financial risks. We discussed earlier the financial range involved and the unpredictability of a lot of the costs associated with MetroLink. That is a very large-scale project. We are in a better place than we were because we now have an external assurance process and a major project advisory group. These kinds of issues can be put to them, where there is a difference of view, to get an objective external view.
On the MetroLink, the cost of the preparatory work has been discussed by the committee a number of times. It is in excess of €100 million, as I recall. Maybe the Comptroller and Auditor General can recall the spend on the MetroLink to date.
The Department had concerns. To the public or ourselves here, it is a huge sum to spend without, to put it simply, a shovel being stuck in the ground. Will there be tens of billions of euro more spent before we actually see something happening? There might be a policy position to not even go ahead with it. Is there concern around that?
I thank the witnesses, the Department and its staff for their work in preparing for today's meeting. I know it is a significant amount of work. I also thank the Comptroller and Auditor General's office for attending and assisting the committee today. Is it agreed that the clerk to the committee will seek any follow-up information and carry out any agreed actions arising from today's meeting? Agreed. I know there is a lot of information. Where the Department of Public Expenditure, National Development Plan Delivery and Reform interacts with the Committee of Public Accounts, there is always going to be a lot of follow-up. I understand that. There are a lot of requests for information but I ask that we have it in a timely manner and in a format that is accessible. Is it also agreed that we note and publish the opening statements and briefings provided for today's meeting? Agreed.