Dáil debates

Tuesday, 13 December 2005

2:30 pm

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 54: To ask the Minister for Finance the progress made to date in 2005 on implementing the 12-point programme to improve value for money in public spending, announced by him on 20 October 2005; and if he will make a statement on the matter. [38992/05]

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The measures I announced on 20 October 2005 on value for money build on existing structures to assist better management of capital projects and programmes and follow the initiative announced by the Government on 11 October on the management of information and communications technology projects and consultancies. I have written to all Ministers asking them to ensure their Departments take immediate steps to implement the measures in areas under their remit. Follow-up work is under way in my Department on updating existing guidelines to ensure all the measures are implemented in full. My Department will write to Departments to notify them of formal changes to existing capital appraisal, procurement, ICT and consultancy guidelines and practice and outline plans for further developments on foot of my announcement.

All other guidance from my Department on matters relating to the better management and delivery of capital and IT projects remain fully in force. This includes rules and guidance for ICT and consultancy, public procurement, public private partnerships and appraisal and management of capital programmes. Primary responsibility for managing capital programmes and projects, ICT projects and consultancies and securing value for money from them rests with line Departments and their implementing agencies. However, I am satisfied that the range of measures in place will better assist Departments and agencies in this respect.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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What arrangements has the Minister made regarding the proposal in his 12-point plan for ex ante evaluations of capital projects that cost more than €30 million? What ex ante evaluation has taken place of the private hospital proposals by the Tánaiste, especially the tax expenditure proposals included in these private hospital ventures? A €100 million private hospital will give rise to a €42 million tax expenditure cost, which may be even more if the business generated through the National Treatment Purchase Fund is also included.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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We will not be involved in a situation where we undermine our own position. We will proceed with the private hospitals' initiative because that is Government policy. We will also ensure that as projects seek approval, my Department will be consulted in the normal way. The arrangements in place for capital appraisal guidelines, which apply to all Departments in respect of all projects of a required level, will be dealt with in the normal way.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Is the Minister saying there will be no ex ante review as promised in section 3 of his 12-point plan and section 4, which refers to projects above €30 million and provides for a thorough cost benefit appraisal and ex ante review? He is saying that where the tax expenditures on a €100 million private hospital is at least €42 million, that he is abandoning the notion of cost benefit analysis. Will he agree that if he is to do so, this in fact would be a dereliction of the promises he made in his speech to the chamber of commerce and of his role where public expenditure is concerned?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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I did not say that in my reply.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Will the Minister clarify whether he is asking for any ex ante reviews to be carried out, as promised in this paper, of private hospital development and the tax expenditures?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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My initial reply will confirm what I said, namely, that the capital appraisal guidelines apply to all projects across all Departments in the normal way. I also pointed out to the Deputy that while she disagrees with the policy initiative, that does not mean we are going to abandon it.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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I welcome the initiative and I want to ask the Minister a few specific questions about the proposal. The idea of having specific individuals who will take responsibility for the success or failure of projects is very welcome. Have those individuals been appointed, with matching contracts for projects, so that we may know who are the individuals responsible for the different initiatives?

I also welcome the provision for audit by the Department of Finance of some of these evaluations. How will the process work by which the Department will be auditing the evaluations carried out elsewhere? In the past I have found it unsatisfactory the way in which the Department of Finance has tended to just wash its hands of any responsibility for projects that were going down the tubes. Only recently, as regards PPARS, was it shown that the Department of Finance twigged that serious aspects were going astray and it intervened very late in the day. I welcome this, however, and would like to hear more about how these two initiatives will work.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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On the Deputy's second point, I do not see it as the Department of Finance's role to do the job of every other Department. It is not good for the Department of Finance to try to micromanage every other Department. The direct stereotypical view of people in politics is that the Department of Finance has been micromanaging for far too long, in fact, and in that sense, that it is holding up projects. I do not see it as my role or that of the Department to do on the operational side what happens in the Office of Public Works or anywhere else.

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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That is not my proposal.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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That is not my proposal. The second point——

Photo of Richard BrutonRichard Bruton (Dublin North Central, Fine Gael)
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It is not mine either.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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We want to ensure, particularly with information and communications technology, that we are apprised ab initio and throughout the process to ensure we know the scope of a project. In the past we have been prepared to give budgets to line Departments to enable them to proceed with their ICT and technology issues to bring about a more effective service. We were all agreed on this. These issues have arisen in both the private and the public sectors. There have been successes in both.

I thank the Deputy for his openness on this point, but it is important that we have an identified person responsible. We cannot have situation whereby no one is responsible in the event of something going wrong. From a management viewpoint it is important that such a person is identified so that everyone knows in respect of every Department in which there are consultancies or operations outside its remit to assist on strategic reviews or whatever, that there are those with overall responsibility for ensuring projects are brought to a successful conclusion and within budget. The moment it is indicated a project will not meet its budget, it is incumbent on him or her to explain the situation adequately so that a systems failure does not arise, as we have seen in the past not just with this Government but under previous Administrations. A public administration culture per se needed to be addressed.

That is the idea behind these initiatives. They are sensible, fair and will work. They will allow the public service not to recoil into indecision but to make decisions on the basis of adequate preparation so that people may proceed with some confidence and we all know where we are going and do not have problems in the future. That is the thinking behind the initiative and, as a result, it is being welcomed by everybody in the service. I will ask individual Ministers to confirm that they have put these arrangements in place to my satisfaction as a result of this initiative.