Brian Cowen (Laois-Offaly, Fianna Fail)

I move amendment No. 1:

"To delete all words after "Dail Éireann" and substitute the following:

—notes the annual report of the Comptroller and Auditor General on the 2004 Appropriation Accounts in the context of a gross expenditure by central Government of more than €41 billion in 2004 and that in line with normal procedure it will now be passed for scrutiny to the Committee of Public Accounts;

—acknowledges the need to pursue best practice in the management of public expenditure to ensure value for money for the taxpayer and in this regard:

—commends the initiatives taken by Government in recent years to promote more efficient and effective management of expenditure including:

—the introduction in 2004 of rolling multi-annual capital envelopes for better management and control of public capital programmes and projects;

—the publication this year of new guidelines for the appraisal and management of capital expenditure proposals in the public sector; and

—the Minister for Finance's plans to introduce targeted reforms to the procurement of public construction contracts and reform and modernisation of the system for employing construction related consultants;

—notes the measures taken to improve tax compliance; and

—acknowledges the major improvements in public services since 1997 arising from the very significant level of resources allocated by Government over that period."

I commend the work of the Comptroller and Auditor General in his role as external auditor of Government expenditure. The Comptroller and Auditor General is a constitutional officer who performs a highly important function, not just in his general audit of expenditure but in the value for money audits he performs that are the subject of specific reports. It is important to note that the subject of this motion is the annual report of the Comptroller and Auditor General on the 2004 Appropriation Accounts. There is a statutory requirement on the Comptroller and Auditor General to report annually to Dáil Éireann on his audit of departmental appropriation accounts. This report is accordingly not some major new report on Government waste but simply the Comptroller and Auditor General discharging his annual function. As is normal, the report focuses on certain issues that have come to his attention.

Poor management of public expenditure and occurrences of wasteful expenditure are not acceptable at any time. This Government is as determined as any other Government in the past to redress problems that come to light. For example, the corresponding report in 1996 highlighted more than 40 issues of concern with the management of public expenditure across a range of Departments and agencies. This included cases where expenditure in excess of the Estimates on various programmes was incurred prior to the approval of local authorities and numerous incidences of unfunded balances on capital works. It also included separate instances of concerns with cost overruns on a number of local authority swimming pools and a number of national school projects.

The 2004 report of the Comptroller and Auditor General must be put in the context of gross annual spend by central Government. In 2004, gross expenditure by central Government on public services, including the social insurance fund, amounted to about €41 billion. Of this, some €14 billion was in respect of pay and pensions, €11.2 billion in respect of social welfare, €10.1 billion in respect of health and €6.6 billion in respect of education. The items of expenditure mentioned in the Comptroller and Auditor General's report represent a small fraction of the total expenditure, probably less than 1% of the gross spend in 2004. I am not calling into question what the Comptroller and Auditor General reports and the need to follow up on his conclusions but we must keep this in that overall context.

As Deputies are aware, the Comptroller and Auditor General's reports are transmitted to the Committee of Public Accounts and form the basis for the questioning by the PAC of the Accounting Officers of each Department. The report of the PAC is in turn remitted to me for comments. My comments are relayed to the PAC after I have consulted the relevant Departments. This process enables the points made by the Comptroller and Auditor General and the PAC to be fully followed up and the introduction of necessary changes introduced in practice to remedy any shortcomings identified.

I acknowledge that all efforts must be directed at ensuring as far as possible that value for money is gained and waste is avoided before the intervention of the Comptroller and Auditor General. I will outline the series of measures which the Government has taken in the recent past to improve value for money, especially in the area of capital investment. I will also outline the excellent achievements of the Government at both a macro-economic level and in the improvement of public services. The issue of the appropriate context for considering the Comptroller and Auditor General's report is readily illustrated by, for example, gross spending on the Education Vote in 2004 which was over €6.5 billion. As far as I can see none of this is commented on at all in the Comptroller and Auditor General's report, but there is a reference to the somewhat technical issue of the status of certain pension schemes.

The €6.5 billion was money well spent, investing in our children, the future generators of economic activity and prosperity, and paying the salaries of over 50,000 teachers, together with myriad other costs. I am sure that improvements can be made in the way it is spent, but the entire education system, from the Minister right down to the individual teacher and through to parental involvement, is focused on delivering a top quality education system. I must conclude that the €6.5 billion spent in this area is a very positive investment on behalf of taxpayers.

In the case of the Department of Social and Family Affairs, the Comptroller and Auditor General's report raises a number of important issues in regard to fraud and overpayments, issues that will always arise given the scale of the operation and these will no doubt be pursued by the Department and the Minister. Gross expenditure by this Department in 2004, including the social insurance fund, was €11.25 billion. This was expended on payment of pensions and other social welfare benefits which are so crucial to the welfare of many of our citizens. Is the Opposition motion suggesting that this expenditure does not represent value for money or is being incompetently administered? I do not think so and I doubt if the beneficiaries of these payments would agree.

I do not deny that there have been instances where better management of expenditure could have been displayed. I note the public comment today in regard to the HSE computer system for managing human resources. The overall cost of this project, estimated at €165 million since 1998, must first be seen in the context of total expenditure on the health service in that period since 1998 of over €61 billion during the development of the system. We are talking about a quarter of 1% of total health spend over the period. It is clearly a ludicrous proposition to suggest that the spend on this project has adversely affected overall health investment. The Tánaiste will speak on this issue in the debate tomorrow evening.

What has emerged in regard to this particular project raises concerns in the Government and the wider public and I look forward to the forthcoming report of the Comptroller and Auditor General on this matter. The board and management of the HSE will have to reflect carefully on this report and take appropriate action. It is crucial that the board has in operation a modern and efficient management information system to underpin effective delivery of health care services. Through the Department of Health and Children, my Department has requested the HSE to review the approach to the implementation of this system and to seek less complex approaches to completing its implementation and subsequent ongoing operation. I understand that such a review is now under way within the HSE. My Department is also ensuring that the approach that was adopted for this project will not be used in any of the large health IT delivery systems being proposed by the HSE.

The Comptroller and Auditor General's report refers to tax evasion in the construction industry. I have consulted the Revenue Commissioners in the matter and wish to advise the House of the major activity being undertaken by Revenue in this area. I do not understand Deputy Burton's point of questioning the independence of Revenue.

See this speech in context