Phil Hogan (Carlow-Kilkenny, Fine Gael)

I welcome the opportunity to introduce this Bill, which has already had a speedy passage through all Stages in the Seanad. This short piece of legislation is needed to allow for the dissolution of the Dormant Accounts Board and to transfer the statutory functions of the board to me as Minister for the Environment, Community and Local Government. This is in line with the recommendations of the McCarthy report and ties in with this Government's promise to reduce the number of State bodies.

Passage of the Bill will serve to further rationalise the bodies under the aegis of my Department. I recently outlined my Department's progress in the rationalisation programme. Overall, savings in the order of €1.9 million have already been achieved through a reduction of 43% in departmental agencies from 21 to 12. The dissolution of the board will take these savings to in excess of €2 million.

As the rationalisation process continues, I expect these savings would rise significantly. The rationalisation is a direct response to the current economic crisis, and a necessary means of contributing to the reduction of overall public sector costs through enhanced efficiency. I will continue to keep the agency rationalisation and efficiency agenda under review insofar as other agencies under my remit are concerned.

Existing dormant accounts legislation provides for the transfer of dormant accounts in banks, building societies and An Post, as well as unclaimed life assurance policies to the care of the State, while guaranteeing a right of reclaim to those funds. The main purpose of the Bill is to reunite account or policy holders with their funds in credit institutions and insurance undertakings. Part and parcel with a right of reclaim, the legislation provides for a scheme of disbursement for charitable purposes or purposes of societal and community benefit of funds that are not likely to be reclaimed.

Under this Bill, the objectives underpinning disbursements from the fund will remain the same so that moneys from the fund can be used to assist persons who are economically, socially or educationally disadvantaged or have a disability. The Bill will also allow simpler arrangements for disbursements than heretofore, as all expenditure from the fund currently require the approval of Government.

The responsibility for approving programmes or measures will now rest with the Minister for the Environment, Community and Local Government, subject to the consent of the Minister for Public Expenditure and Reform, and I wish to thank the members of board for their diligent work in this area to date. Disbursements schemes or action plans will henceforth be prepared by the Minister in consultation with relevant Government colleagues and be laid before the Houses of the Oireachtas for a period of 21 days which will allow for debate and discussion. The levels of new measures or programmes for disbursement from the fund are likely to remain low given the current budgetary constraints.

In any case, disbursements will continue to be made from the Dormant Accounts Fund through the Votes of relevant Departments and will be Exchequer neutral. As is currently the case, the assessment criteria and application procedures for dormant accounts funding must be published, as must a list of the projects ultimately funded.

The Bill provides that the cost of engaging service providers, such as Pobal, to administer the application process will be met from the fund, while normal administration costs incurred by relevant Departments will be met from within existing budgets. The Bill will also draw on the expertise, knowledge and resources of existing public bodies, which will enable informed, objective decision-making, consistent with public policy priorities and available resources.

The Bill provides that a statement containing details of the approvals will be laid before the Oireachtas and a list setting out the approved measures and projects, and specifying the amounts to be disbursed, will be published within one month of the approvals being given. These rigorous and extensive measures confirm the Government's commitment to ensure that decisions on the fund are informed by the policy of the Government and will have regard to the public interest, and measures will be accessible to public application and fully subject to Oireachtas and public scrutiny. This ensures the process is transparent and fair, and seen to be fair.

A couple of issues were raised during the course of the discussions and debate in the Seanad that I would like to address to the House. These relate to the size of the fund, its possible augmentation and whether it could be ring-fenced for any particular sector or group. Since its establishment in April 2003 to the end of August 2011, transfers to the fund have totalled some €626.59 million, which includes interest earned of €35.53 million. Funds reclaimed in that period by account holders amounted to approximately €218 million. Some €267 million of disbursements have been approved, with €239 million spent on projects of community benefit to date. The net value of uncommitted funds in the fund is currently €82 million.

In practical terms, increasing the amount available in the fund, for example by adding credit unions to the list of agencies covered by the legislation or by including the proceeds of funds derived from the activities of the Criminal Assets Bureau, does not necessarily allow for the introduction of new dormant accounts measures or programmes. While applying the provisions of the dormant accounts legislation to credit union accounts, for example, would increase the amount available in the fund, Government Departments and agencies would still have to source moneys for dormant accounts programmes and measures from their Exchequer allocations in the same way as any other funding programmes.

It is important to note when the moneys spent on dormant accounts measures and programmes are reimbursed from the Dormant Accounts Fund, they are refunded to the Exchequer rather than to the spending Department. For this reason, dormant accounts expenditure is subject to the same constraints within Departments as any other spending programme.

At a time of severe budgetary pressures, resulting in reduced allocations across Department Votes, there is a need to prioritise and try to maintain existing funding programmes. Expenditure on new dormant accounts measures or programmes could, in current circumstances, lead to reduced spending on other existing programmes. As such, creating a potential new source of dormant accounts funding would serve little practical use at this time. However, this is a matter I am prepared to keep under review, particularly in the context of any improvement to the budgetary situation.

Dormant accounts funding cannot be regarded as free money as is sometimes suggested. Under Government accounting procedures, disbursements on dormant accounts measures are paid in the first instance, as I said earlier, upfront from each Department's Vote in the same way as any other spending programme. The difference is that once expenditure takes place it is reimbursed to the Exchequer from the Dormant Accounts Fund in the form of appropriations-in-aid payable through the relevant Department's Vote. In this way, the costs associated with dormant accounts measures are Exchequer neutral, though it should be noted that Government Departments cannot spend appropriations-in-aid directly themselves once they are reimbursed from the fund. They are instead refunded to the central Exchequer.

It has also been suggested the fund could be ring-fenced for the community and voluntary sector. Deputies will appreciate that, given its focus as set down in the legislation, a significant proportion of the funding disbursed to date from the fund is already through channelled and voluntary groups. Allocations from dormant accounts are focused on programmes or projects to assist the personal and social development of persons who are economically or socially disadvantaged, the educational development of persons who are educationally disadvantaged or persons with a disability. This is in addition to the other substantial supports provided by my Department to the sector annually through other programmes and schemes.

Furthermore, as I indicated in the Seanad, moneys disbursed from the fund increase Government debt levels as the money continues to belong to the account holder, who can reclaim it at any time, and not at any stage, from the State. Consequently, every euro spent from the fund is regarded in accounting terms as a potential Government liability, regardless of how unlikely it may seem. Therefore, as I said before, the fund cannot be regarded as free money.

The detailed technical provisions of the legislation are set out in the explanatory and financial memorandum accompanying the text of the Bill. At this stage, I would like to outline the main provisions of the Bill.

Sections 1 and 2 are standard provisions relating to definitions and so on. Section 2 specifically provides for the appointed day, to be determined by order, when the Dormant Accounts Board is dissolved and the Act comes into force, transferring the functions of the board to the Minister.

Section 3 of the Bill will replace Part 6 of the principal Act, inserted by Section 8 of the Act of 2005, and sets out the new disbursement arrangements. Sections 40A to 44A are subsets of section 3 of the Bill. Section 40A updates definitions to take account of changes provided for in the Bill. Section 41 sets out the purposes for which disbursements can be made.

Section 42 provides for the making of a disbursements scheme no later than 12 months after the appointed day and will set out the types of programmes or projects for which moneys may be disbursed. The disbursements scheme, or any subsequent amendment to it, must be prepared by the Minister, having consulted with the Ministers for Health, Education and Skills and Social Protection. The Minister may also consult with other Ministers or persons. A scheme or an amendment to a scheme must be approved by Government and must be laid before the Oireachtas, and the Oireachtas will be allowed 21 days to challenge it.

Section 43 provides for the preparation of an action plan each year where the Minister has made a disbursement scheme. The process of making the action plan is very similar to that of the disbursements scheme in terms of consultation with other Ministers and so on.

Once the plan is adopted, it is published and a copy is laid before the Houses of the Oireachtas, so that it may be challenged within a 21-day period. Provision is also made for adopting, or not adopting, an action plan, and for not proceeding to invite applications under the plan, if appropriate in certain circumstances. Any decision not to proceed must be approved by Government.

Sections 43A and 44 of the principal Act, as amended under section 3 of the Bill, provide that the Minister within whose remit lies responsibility for a programme or type of project specified in an action plan is required to publish, or cause to be published, an invitation to apply for disbursements, which must include the assessment criteria, application procedure, deadline and any other information the Minister wishes to include. They also make provision for applications to be assessed by or on behalf of a Minister of the Government. As is currently the case, following assessments, recommendations must be made as to which measures or projects should receive disbursements. These recommendations are submitted in the first instance to the relevant Minister before being submitted to the Minister for the Environment, Community and Local Government for approval, subject to the consent of the Minister for Public Expenditure and Reform. The Minister for the Environment, Community and Local Government's recommendations are submitted to the Minister for Public Expenditure and Reform for approval and the list of approved measures or projects are laid before both Houses of the Oireachtas.

Section 44A of the principal Act, as amended by section 3 of the Bill, provides that disbursements must be paid from the Oireachtas and reimbursed to relevant Ministers, on the direction of the Minister for Public Expenditure and Reform, by the National Treasury Management Agency, and must be regarded as appropriations-in-aid.

Section 4 is a technical amendment updating cross-references to the NTMA and the board. It also provides that the Minister must, before 30 June each year, prepare an annual report on disbursements during the preceding year, to include any findings, conclusions or recommendations concerning such operation. The annual report is submitted to Government before being laid before each House of the Oireachtas.

Section 5 provides for the dissolution of the Dormant Accounts Board, with any reference to it in any enactment or legal document to be construed as a reference to the Minister. The chairperson of the former board will remain accountable to the Committee of Public Accounts in respect of disbursements by the board during his or her tenure.

Sections 6 to 8, inclusive, make standard provision for transfer of assets, liabilities, taking over contracts and so on. Section 9 provides that the board must prepare final accounts, covering the period from the last annual accounts up to the day immediately before the appointed day. These accounts are to be submitted to the Comptroller and Auditor General for audit, and the audited accounts must be laid before each House of the Oireachtas.

Section 10 provides for the final report of the board, including particulars for those to whom disbursements were made and the amount of each disbursement since the last annual report of the board. This report will be laid before the Houses of the Oireachtas. Section 12 provides for the Minister to take ownership of the board. It provides that the 2009-2011 plan, as prepared by the board and approved by Government, continues in effect until the Minister's first disbursement scheme is made, and must be treated the same as if it were a disbursements scheme by the Minister.

Section 13 updates the principal Act to take account of the new term "Disbursement Scheme" and other technical amendments. Section 14 provides for the repeal of sections 30 to 40, inclusive, of the principal Act. Section 15 deals with the Short Title, collective citation and commencement.

This legislation strengthens Government and Oireachtas oversight and, at the same time, simplifies administrative arrangements and the associated processes in respect of grants awarded from the Dormant Accounts Fund. I commend the Bill to the House.

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