John McGuinness (Carlow-Kilkenny, Fianna Fail)

I move: "That the Bill be now read a Second Time."

The purpose of this Bill is to make local authorities accountable to the Comptroller and Auditor General and, by extension, put them under the remit of the Committee of Public Accounts. The reason this is necessary is because every year local authorities receive substantial funding from the Exchequer, the spending of which cannot be followed by the Comptroller and Auditor General.

The latest figures are available in the annual report of the Comptroller and Auditor General, which was published last September, remind us that we are dealing with the expenditure of an enormous amount of public money and cause me to wonder why the Comptroller and Auditor General has not always been involved. The figures clearly demonstrate why the Comptroller and Auditor General should be allowed to audit local government. The amount of money provided in 2007 was €5.5 billion, in 2008 it was €5.7 billion, in 2009 it was €5.25 billion and in 2010 it was €4.45 billion.

I am delighted that this Bill is being taken today as a Private Members' Bill and not in Opposition or Government time. I am aware that many individual members of all political parties and none support what this Bill is seeking to achieve. This is exactly the sort of Bill that should be put to a free vote because it demonstrates our determination to control and hold accountable those who spend and collect public money. This is an accountability which members of the public often presume we can enforce but little do they know.

Good governance is the mantra of the times in which we live. It is a comment on its absence over many years that a troika of technocrats is in Ireland to do the job that successive Governments avoided or ignored. One cannot have good governance without accountability and transparency. The way in which the Dáil controls and audits the spending and collection of taxpayers' money is critical to good governance. If we do not carry out our work diligently and fearlessly, hand the responsibility to others rather than not supervise and, if necessary, penalise, or stand back when we should stand up, we are not doing an important element of the work we were elected to undertake.

The Committee of Public Accounts is an arm of the Dáil and, along with all committees, it should be a strong and powerful arm because it is one of the means in which the Dáil demonstrates its power in a very public and meaningful way. The committee gained its reputation, the goodwill of a large section of the public and the respect of the rest during the DIRT Inquiry. In the course of that inquiry banks and members of the public were made to provide information and pay for their mistakes over a short space of time, as was right and proper. I draw Members' attention to the other side of the coin, however. When public service accountability, transparency and efficient use of billions of euro in taxpayers' money is under scrutiny, timeframes are ignored, documents and written answers are not produced in a timely fashion and the committee is frequently treated with barely concealed annoyance and condescension. I hasten to add this does not apply to all who come before us but a hard core believe themselves to be above all that committee nonsense.

The important point to remember is that we do not live in a two speed republic. What is good for the general public should be applied without fear to the public service. The State is accountable to the Dáil and Members of the Dáil are accountable to the Irish people. The committee takes its duty seriously and, in this Bill, I seek what I believe are necessary powers to audit, investigate and hold accountable those in local authorities who together spend billions of public money in a manner that is often far from satisfactory. The Members of this House are the people who can make this happen. This is not about party politics; it is about our belief in ourselves, our willingness to demand good governance come what may and our ability to withstand the pressures that will be brought by those who prefer the veil and the vague to the cold light of objective and close scrutiny. We spend most of our time in this House debating ways of taking money through one tax or another and too little time on how we can save money, while water drips into the ground, funds are unwisely spent and expensive consultant reports fill the dustbins of Departments.

I was a member of two local authorities over a 25 year period. During that time I saw little or no scrutiny of how taxpayers' money was spent. An audit report was an exotic creature that appeared now and again during council meetings but members did not engage with it for fear it would bite. As a member of the Committee of Public Accounts between 2002 and 2007, I discovered that familiarity with the creature was not enough. One could look but one could not touch. The creature remained exotic but it was clearly expensive to maintain, even though its keepers we're not prepared to talk about this. Nevertheless, it was the Committee of Public Accounts which discovered a €9 million hole in the finances of one local authority, which brought the seriousness of the committee's inability to investigate sharply into focus.

In September 2005, the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, who was then a member of the committee, produced a report which examined the whole issue of local government accountability and transparency and concluded that it was neither. The report found that the audits undertaken by the local government audit service did not feed into the Dáil accountability process, as embodied by the Committee of Public Accounts, and as a result it was difficult for Dáil Éireann to be satisfied, as the funding organ, that the money provided was properly used and achieved value for money. The report went on to point out the practical difficulties that arise where local authorities are not held accountable to the Comptroller and Auditor General even though the accounts of funded bodies, such as the National Roads Authority, are audited by that office. The report concluded that this represented a significant restriction in the Comptroller and Auditor General's capacity to account for a significant portion of national public expenditure. In all honesty, how can we look the people of this country in the eye and tell them that billions of their money is being spent in a manner that sometimes raises grave doubts, and the State's most senior financial officer cannot properly investigate what is going on?

The report went on to outline the shortcomings of local accountability, when it stated:

The restriction on the Comptroller's capacity to account for the expenditure of these sums might not be of concern if local audit was an adequate substitute. However it is not. This is not a criticism of the professional adequacy and competence of the Local Government Audit Service. What is of concern is the lack of any coherent, systematic or sustained response by local authority members to the statements and reports of that service. Put simply and starkly, I am not convinced that local authority audit committees function in any meaningful sense, as a means of ensuring accountability for the stewardship of public funds.

l am quoting from the report and these are the words of a respected parliamentarian and Minister in the current Government, who was clearly unhappy with what he had seen and wanted it changed. I do not use his name for political reasons. I use it because it has weight and I respect what he stands for. I share his view and would contend that anyone who knows the system as well as Deputy Rabbitte or I do, would not disagree with the conclusions of that report.

Deputy Rabbitte's words are even more relevant today than when they were written six years ago. I could say that there is a greater need for change now, but the fact is that need for change was there when we had the money to afford it and perhaps if we had been as rigorous about our supervision across the board then we might not be where we are now. We have been given a harsh lesson about what happens when those who accept leadership roles hand unsupervised responsibility to others.

Most of us are not accountants, auditors or solicitors but no one in this Chamber is without experience or common sense, and we undervalue those virtues. Too often, we sell ourselves short to those who sell themselves big. We should remember that we offered ourselves as leaders and law-makers, and we made promises; we climbed a steep road to get where we are today. We are the elected representatives of the people who have given us power that we should not hesitate to use on their behalf. A healthy, mutually respectful tension should exist between politicians and public servants but the responsibility to lead is ours. If we do not do that job, a vacuum results which creates governance and control stresses that are unhealthy in a democracy and damaging to politics.

Let me illustrate where that lack of tension and rigour has led us, and give examples of the cost of lack of supervision, accountability and transparency in local government which, I believe, will clearly demonstrate that the people of Ireland, who are laden with petty rules and endless red tape, are not getting value for money, or the accountability or transparency that creates it.

Yesterday at the Committee of Public Accounts, we dealt with the cost of maintenance and improvement of local and regional roads for which €411 million was given by the NRA in 2010. The concern raised by the Comptroller and Auditor General in his report related to the cost of resurfacing work, which for regional roads ranged from €3.78 per sq. m in Clare to €10.87 per sq. m in Sligo. For local road resurfacing, the spread ranged from €2.72 per sq. m in Cavan to €11.53 per sq. m in Sligo, where the cats eyes must be made of diamonds. That is just one instance where the Committee of Public Accounts needs to be able to investigate to ensure that public moneys are not being wasted. There may be a valid reason for the divergence but it is hard to imagine that the taxpayer is getting value for money from Sligo County Council. It is in the interest of local authorities and taxpayers that this be investigated by the Comptroller and Auditor General and the fact that it is not only weakens public confidence in the Dáil. The NRA can conduct certain audit functions on the spend. It can cold call on different projects, yet the Comptroller and Auditor General cannot do so.

Let us look at water services. In 2010, the Exchequer allocated €535 million to local authorities for water and sanitary services. In fact, and I quote Comptroller and Auditor General figures here, in the period 2000 to 2010, €5.2 billion of Exchequer resources were invested in the upgrading and provision of new water services infrastructure. One of the ways we judge the effectiveness of that investment is in water quality and to be fair, this has shown constant improvement. The second way to judge the effectiveness of this investment is to look at how much treated water goes unaccounted for every year. The average loss across all councils is 41%, twice the OECD average. In some council areas, the percentage loss is as high as 58%. The result is that we invest heavily as a State in treating water, yet 40% of that investment is negative, as the water leaks from the system or whatever, but it does not get to the end user. We have now come to the point where the end user will have to pay, not only for the water he or she uses but also, in effect, for the water that is wasted. All the Committee of Public Accounts can do is raise the matter with the Department of the Environment, Heritage and Local Government.

The committee must work at a macro level, which is useless. The responsible people in local government, county managers and directors of services, do not come before the committee. We deal with them though a filter of their departmental colleagues and in-house internal auditors, all of whom are too connected to make good governance possible. It is an irrational system that does not inspire confidence and with the best will in the world, in-house auditing involves conflicts of interests and does not have the impact of a completely independent audit.

All of this has not been lost on concerned citizens and taxpayers, who are beginning to look past politicians, which is not good. A number of issues have been raised by the public with the Committee of Public Accounts in the past year and we have had to tell those concerned that there is nothing we can do about what they believe is a waste of public funds.

The Minister of State, Deputy Jan O'Sullivan, will understand that delivering this message does not sit easily with me. In effect, l am telling the public that, despite its perception of the Committee of Public Accounts and of the Dáil and politicians, we are not in control of so much that goes on. How long does the Government think we can support that charade before we lose the little credibility and trust that we still have? We must assert our authority.

Let me give examples of the matters brought to the attention of the Committee of Public Accounts with which we cannot deal and for which nobody, except politicians, is held accountable because the public believes in the pretence that we are in control when we are not. In some instances, we are only scapegoats for those to whom we have delegated control, whom we are not able to supervise or hold accountable in any meaningful way.

In the case of the Poolbeg incinerator, where €80 million has been spent on a project the viability of which is questionable, the Committee of Public Accounts asked the Accounting Officer to ask the local government audit team to investigate the spend to date. This was agreed, but the committee has no idea when the report will be completed or when we are likely to examine it. It will be a long time before we see white smoke on the Poolbeg report, unless the Committee of Public Accounts is allowed to light a fire under the process.

On the purchase of lands by Wicklow County Council in Greystones, and the fact that the local authority was forced, based on the 2007 contract, to pay €3 million in 2011 for lands that are worth a fraction of that amount, I am told that these lands will never be developed as they are in a flood plain. What happened there, and why? The Dáil needs to know and the public has a right to know. The recent High Court judgement against Meath County Council which led to an award of €4 million being made against the local authority for planning irregularities is another matter on which the Committee of Public Accounts should be able to investigate and report.

The Comptroller and Auditor General can examine a body such as the NRA and look at the effectiveness of its expenditure, which puts pressure on the body to do its business efficiently and well. Local authorities, on the other hand, only seek to maximise the grants they can get from central government. The only way we can ensure that those grants are used in a manner that gives value for money is to have local authorities accountable to the Comptroller and Auditor General and, therefore, to the Committee of Public Accounts.

It is evident what the problem is and how it can be remedied. What is not evident is why local government fears - and quietly attempts to block - giving powers to the Comptroller and Auditor General. If for no other reason, and there are plenty, this is why we should ensure that these powers are given.

Since my appointment last year as Chairman of the Committee on Public Accounts, I have been advocating change. To me, it makes no sense that any layer of Government cannot be held to account by the Comptroller and Auditor General for the expenditure of significant amounts of taxpayers' money.

I note that in the Public Service Reform Plan, published last year by the Minister for Public Expenditure and Reform, Deputy Howlin, the local government audit unit, which is part of the Department of the Environment, Community and Local Government, was to be the subject of critical analysis this year, with a view to seeing whether it could be amalgamated with the Office of the Comptroller and Auditor General. I understand the review is being conducted by a group appointed by the Minister for the Environment, Community and Local Government and will be concluded at the end of June. I do not want to prejudge the finding of this group, but I have a concern that it has not sought the views of the Committee of Public Accounts. There are 140 professional staff in the Office of the Comptroller and Auditor General and there are 40 similarly qualified staff in the local government audit service. It makes sense that these bodies are amalgamated. I would be surprised and disappointed if the report found otherwise.

On average about 50% of local government expenditure comes from the State and the remainder is raised locally through commercial rates and various charges. For some of the larger local authorities, and especially the local authorities representing major urban areas, the Exchequer contribution will be below 50%. How local authorities spend their own money is a matter very much for each local authority. The Committee of Public Accounts cannot be involved because local government is constitutionally independent in its day to day functioning.

This Bill will not jeopardise that independence, rather it will deal with the reality outlined in the 1995 report produced by the current Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, which is that the Dáil must have mechanisms to account for the moneys allocated by a decision of the Dáil. That is the reality. Change needs to happen and it needs to happen quickly. The Government has a duty to investigate and hold accountable all those who spend public money. There is no doubt in my mind that this is best done by empowering the Comptroller and Auditor General.

A measure of the seriousness with which the Minister for Public Expenditure and Reform, Deputy Howlin, and his Department face the challenge of public sector reform will be if they succeed and achieve what is set out in this Bill. Vested interests will argue for the status quo and the Minister will have to deal with inertia and take bold steps if he wants to ensure that the taxpayer is the ultimate winner. Will common sense prevail or will we see Ministers and Departments hiding behind conventions and supporting systems that simply do not work? Senior management will ensure that systems, procedures and governance structures are in place and respected if they know that they will be held to account in public before the Committee of Public Accounts, which does not happen now. Furthermore, county managers should also rank as Accounting Officers. That alone would be a big step towards good governance, transparency and accountability. We have the template for how it works. We need look no further than Northern Ireland, where the audit office there has responsibility for departments, state bodies and local authorities.

I will finish by going back to the basic law of this State, our Constitution, and in particular to Article 33 which provides for the Comptroller and Auditor General "to audit of all accounts of moneys administered by or under the authority of the Oireachtas". To my mind, moneys that are voted in this House for roads, water services or social housing and allocated to local authorities fall into the category of moneys administered under the authority of the Oireachtas. This Bill is necessary. It gives us the right to follow money to the point where it is spent. It gives the Dáil, through the Committee of Public Accounts, the right to ask questions. It puts power where power should rest and demonstrates to the public and public servants that the Dáil is in control and takes that responsibility seriously. I commend the Bill to the House.

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