Pat Carey (Dublin North West, Fianna Fail)

A formal five-year agreement made between the Irish Banking Federation, its member banks and the Department of Defence and signed on 11 May 2005 provides that the banks pay the total actual costs incurred by the Defence Forces in the provision of cash escorts.

The costs charged to the banks comprise the following: the total salary costs including allowances, pension contributions and PRSI of the military personnel assigned to carry out cash escort duties; subsistence payments to military personnel directly engaged in the duties; the operation and maintenance costs for vehicles used for the purposes of cash escorts, on a per-mile basis, calculated in accordance with Civil Service standard methodology for the calculation of mileage rates for specific vehicle types; and the operation and maintenance costs for aircraft deployed in support of cash escort operations.

Costs in respect of each 12-month period to the end of December are paid the following year on or before 1 June. This is to allow for the compilation of returns from the brigades and allocation of costs following the year's end.

Prior to this initiative, it had been the case that an annual contribution of €2.86 million was paid by the banks to the Department in respect of the provision of cash escorts. The contribution from the banks was designed to cover in part the total costs to the State of providing cash escorts. The amounts received from the banks in respect of the years 2005 to 2008 are as follows: 2005 - €6.03 million; 2006 - €6.47 million; 2007 - €7.34 million; and 2008 - €7.45 million. The total costs due for 2009 are being calculated in the Department at present.

Negotiations on a new agreement with the banks to replace the current agreement will take place with the IBF and the banks later this year. In the policy changes outlined in the budget for 2010, it was indicated that appropriations-in-aid will be increased, including through charging An Post, the Central Bank and other organisations for services on the same basis as the banks. The Central Bank has agreed to pay for costs incurred by the Defence Forces in providing security services. Similar to the agreement with the banks, the amount due in respect of 2009 will be paid on or before 1 June 2010. Initial contact has been made with the other organisations, including An Post, which receive similar services from the Defence Forces with a view to reaching agreement on costs relevant to the respective bodies.

See this speech in context