Dáil debates

Wednesday, 11 October 2006

10:30 am

Photo of Enda KennyEnda Kenny (Leader of the Opposition; Opposition Spokesperson on Northern Ireland; Mayo, Fine Gael)
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There seems to have been a change on the Government benches this morning.

It is just over a year since I raised the PPARS project, a waste of €150 million of taxpayers' money on a dud payroll system that overpays, underpays and mispays. It does everything but what it is supposed to do. At the same time, the frontline situation in the health services is not what it should be. Today's newspapers tell a story of a suicidal teenager on a trolley for seven days, step-down beds being as scarce as hens' teeth and people running marathons and fundraisers for cancer care services.

It appears the Government's taste for waste is insatiable. Under PPARS the black hole is getting bigger. Does the Minister for Finance know that in addition to the €150 million already spent on PPARS, this year a further €18 million has been sanctioned for it? Does he know that €10 million of that money is going to the consultants who issued the report on PPARS last year? Having sanctioned this money, is the Minister confident that the Health Service Executive is capable of handling information technology projects?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The PPARS project is, as we speak, providing payments for up to 30,000 employees and dealing with the HR issues of more than 70,000 employees in the health service. It was initiated by the health boards during the tenure of the rainbow Government.

On the rolling out of the IT projects, it is clear that I have introduced value for money initiatives that have ensured that we are able to assess and process those projects in a way that is more accountable than would have been the case in this instance, although there were successes apart from this one. I make those points because it is sometimes indicated by the Opposition that the projects are achieving nothing.

On the money being spent on IT, it is clear that if we want a modern health service, we need improved IT processes to measure outcomes and to learn for future policy formulation. The suggestion that we should not have IT processes is null and void.

The question was asked whether this money could be diverted to other areas of the health service where service pressures exist. The Government is applying unprecedented resources to many of those areas and yesterday it was acknowledged by one of the trade union leaders that there has been a 40% improvement in accident and emergency services since the initiative was brought forward by the Minister for Health and Children and put in place by the HSE.

Photo of Enda KennyEnda Kenny (Leader of the Opposition; Opposition Spokesperson on Northern Ireland; Mayo, Fine Gael)
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The Taoiseach says that health workers work a six hour day and take Fridays off. It is obvious that the Minister for Finance is not informed about what is happening in the IT project systems within the Health Service Executive and that someone is not telling him. Is he aware that despite a provision of €70 million for IT projects in the HSE this year, as of 27 September, not a cent apart from the PPARS project has been sanctioned by the Department of Health and Children?

While the PPARS project gets €18 million extra, we need IT projects that work. Here are three examples: a €260,000 project to boost mental health services for children in the north east — no sanction, no choice, no chance; a €122,000 project for IT dealing with orthodontics for patients, including children, in the north west — no sanction, no choice, no chance; a €166,000 IT project dealing with vascular surgery programmes in the mid-west — no sanction, no choice, no chance. Those are three small, patient-centred IT projects that have not been sanctioned ten months after the Minister for Finance gave his overall imprimatur.

After 21 months, there is still no national director for IT projects within the Health Service Executive. The HSE says it wants breathing space, after 21 months, when €168 million has been spent on PPARS, but here are three small, patient-centred IT projects that are yet to be sanctioned by the Minister for Health and Children ten months into the year. Does the Minister for Finance believe that we should operate in this way? Is he happy that sort of project, which is patient-centred, should be left to one side? When will he sort this out politically?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The leader of the Opposition is not up to date on the accountability issues regarding how health funding is spent. The money has been sanctioned to the HSE and these are matters for it.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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Pontius Pilate.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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I am just updating the Leader of the Opposition because if he is not up to date with procedures, people will have no choice and no chance. The Opposition is totally backward about the arrangements that are in place. The HSE deals with the sanctioning of individual projects and does not require my sanction or that of the Minister for Health and Children. We have given the global allocations.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Blame someone else.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The HSE is rightly assessing all these arrangements in relation to IT processes, some of which, as Deputies will be aware, come from the old health board system. These are being evaluated by the former CEO of the Southern Health Board, Seán Hurley, an eminent and competent health board official. Mr. Hurley has been given the responsibility of doing this on behalf of the HSE, which has taken further independent IT advice to assist it in this matter.

In relation to specific projects, these matters are evaluated by the HSE and can be dealt with by it specifically. In overall terms, the Government has increased the allocation for mental health care services by more than €25 million this year. Its record in this area far surpasses any of its predecessors.

The point to be made to the Fine Gael leader is as follows. IT processes that are necessary are being evaluated by the HSE and those done in the past will proceed. The HSE is getting the expertise necessary to ensure that is done. The global allocations which have been provided are greater than those given in the past because they are a fundamental driver of reform in the health service.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I want to ask the Minister for Finance about a second botched privatisation that we have experienced in recent days. The Minister will have heard a wide range of commentators on the mess that now confronts the Government. He will have heard the chief economist of the Taoiseach's favourite bank, Friends First, state that the sale of Aer Lingus is the second botched privatisation by the Government. What is the Government's strategic approach to the hostile takeover which is under way?

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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It does not have one.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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How is it that the Government has been completely taken by surprise? How is it that we have had the Minister for Transport floundering in the fashion we have seen over recent days? A sum of €30 million of taxpayers' money was spent on advisers, yet the Minister comes into the House, flailing around the place, making clear that it never crossed his mind that this might happen and, effectively, that he does not know what to do about it.

The Minister stated: "A monopoly is bad for business. It is bad for this country, the customer, the travelling public and tourism interests." His conclusion is exactly the position he has brought about. He was warned that this was a probability if the company was floated. Maybe we anticipated that it would have been British Airways rather than Ryanair, but we are heading towards having a single private monopoly in the aviation sector here.

Of all the hapless Ministers in this hapless Government, the Minister for Transport, Deputy Cullen, is the most accident prone. Apparently Deputies were not supposed to hear the remark but I heard the Tánaiste state with relief yesterday: "We survived it." What a commentary on the Tánaiste. Can Aer Lingus survive this Minister?

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The IPO was a successful floating of the equity by the State. It went well and was held up by the market as such.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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Michael O'Leary agrees.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The only thing I recall during that period was silence from the Labour Party because——

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is our fault.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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I listened in silence to what Opposition Members had to say because it would have shown up the obvious disagreement between the Fine Gael and Labour parties on the issue.

The Government is in favour of a strong and independent Aer Lingus. Access to private equity, which has been provided for now, enables the company to proceed with a strategic plan. Ryanair has made a proposal on what it wishes to do. It must acquire the shareholding in the first instance and has not done so. I understand it holds about 15% of shares as matters stand, which is a long way from——

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is not 15%.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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Sorry, the figure has increased to 19% in the past couple of days, which is a long way away from the majority shareholding the company seeks. There are regulatory frameworks to deal with competition and other questions and the Government is preparing to engage fully in rigorous support of the public interest.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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One would not want to rely on the Competition Authority.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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One should not draw conclusions from the fact that one company wishes to proceed in a certain way because it does not necessarily mean that will happen.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I am completely taken aback by the Minister's apparent lack of grasp about what is happening. The shareholding of Ryanair in Aer Lingus is not 15% but 19.2% as every school child in the country knows. How can the Minister state with a straight face that the IPO was successful? The Government sold off the company at a bargain basement price, as everybody in the country now acknowledges. It did not see coming what has since transpired.

Why did the Government reduce its shareholding by 7%, from 35% to 28%, thus facilitating what is now under way? What is the explanation for that move? Apart from hiding behind the regulatory arrangements in place, what exactly is the Government's strategy? What does it propose to do and what is it doing? Does the Competition Authority have any role in this matter or is it a European competition issue?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Deputy Rabbitte should take his time. He is talking hot air as usual.

Photo of Pádraic McCormackPádraic McCormack (Galway West, Fine Gael)
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The Minister is awake.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Allow Deputy Rabbitte to continue without interruption.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Is the Government having any discussions with the ESOT?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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These are important questions about which Deputy Rabbitte should ask his advisers.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Minister was caught out. Where are his advisers now?

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I am amazed at the Minister's brass neck. If he had worked out this privatisation on the e-voting machines he bought, he would not have made such a hames of it. Why did he reduce the Government's stakeholding in Aer Lingus? What strategy is the Government now pursuing? Has it had discussions with the ESOT or others about preventing the proposed arrangement? Will Ryanair not in any event have manoeuvred itself into a position in which it can stymie the future development of Aer Lingus? What will this development do for competition in the aviation sector? I would appreciate answers to these questions because this issue is very important for the country.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The Deputy obviously does not have a grasp of Stock Exchange rules if he thinks we can go off and talk to the ESOT on this matter. We cannot do so. Perhaps he should read up a bit on the situation.

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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The Minister should ask his expensive advisers.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The shareholding of the State is 28.3%. A shareholding of 25.1% ensures that another company cannot acquire the 75% threshold required to force delisting. It also means the company's memorandum and articles of association cannot be changed without the State's agreement. Maintaining this level of shareholding was designed, among other things, to frustrate any hostile takeover attempt. Even if another company buys a majority share, Aer Lingus will continue to operate on an independent financial basis. Without delisting and operational integration with Ryanair, it is hard to see how the synergies which motivate mergers could be realised.

The Government remains fully committed to competition in aviation markets and will not sell its shares in Aer Lingus. It is vigorously opposed to the emergence of a new monopoly in Irish aviation. An Aer Lingus-Ryanair merger is not in the best interests of competition.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Ryanair proposes a takeover, not a merger.

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The economy has been well served by having at least two domestic airlines providing complementary but different services to and from Ireland. It is due to the value of having more than one domestic airline that a two airline policy was developed in the early 1990s by giving Ryanair exclusive rights on certain routes and securing the future of that company. The Government is firmly of the view that Ireland's economic interests are best served by having as many airlines as possible competing vigorously and seeking to exploit all possible opportunities for new services. It wants a strong Aer Lingus and a strong Ryanair competing with each other.

When the Ryanair offer is formally made, it will be a matter for the board of directors of the company to evaluate the offer and express an opinion to shareholders. It has done so. The board of directors of the company is working with advisers to ensure the position of shareholders is fully protected. There is a question over whether jurisdiction for merger clearance rests with the European Commission or member states, including Ireland, and it is expected that jurisdiction will lie with the European Commission.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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What happened to the Ceann Comhairle's clock?

(Interruptions).

Photo of Brian CowenBrian Cowen (Minister, Department of Finance; Laois-Offaly, Fianna Fail)
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The Departments of Transport and Finance are working closely with advisers preparing a case for submission to the European Commission and will also consult the Attorney General.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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What is the answer to the question? The messenger could have read that. It was embarrassing. Why did the State reduce its stakeholdings? That is contemptuous.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Deputy Rabbitte does not understand it.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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There is no provision for a supplementary question. I ask Deputies on all sides to stay within Standing Orders on Leaders' Questions.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Deputy Cullen says I do not understand it.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I ask Deputy Rabbitte to resume his seat.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Clichés and soundbites will achieve little.