Wednesday, 18 October 2006
On 11 June, I announced a revamping of the expenditure review initiative, ERI, which has been retitled value for money and policy reviews and has a broader coverage. For the period 2006 to 2008, the revamped framework will encompass formal reviews already agreed to be carried out under the ERI as well as all other policy reviews conducted and commissioned by the Departments which impact on value for money.
Under the new arrangements, the Government has, on my recommendation, approved some 90 formal value for money reviews to be carried out by Departments and offices for the period 2006 to 2008. The programme of reviews in each Department and office will focus on significant areas of expenditure and major policy issues and, as a general rule, will have a minimum indicative coverage of 10% to 15% of their respective budgets.
Departments have been directed to give priority to the timely completion of the new round of reviews. All the reviews will be published and submitted to the relevant select committees for consideration and I have written to the chair of each committee setting out the reviews to take place relevant to that committee's remit. Other policy reviews which impact on value for money will be published and submitted to the relevant select committee in general. Departments will also report on their progress on value for money issues in their annual reports and identify separately in their Estimates their expenditure on value for money and policy reviews.
This new initiative builds on value for money reforms already instituted such as the introduction of multi-annual capital envelopes, revised capital appraisal guidelines, public procurement reforms and measures in regard to information and communications technology and the major consultancies announced last October. They will also complement my budget 2006 initiative on the production of published annual output statements by Ministers to accompany consideration of the estimates of expenditure from 2007.
Has the Minister examined the list? It is bizarre that of the 92 reviews promised, 31 are politely referred to as roll-overs. To the layman, this means that reviews promised four or five years ago were never undertaken in most cases. The Minister now states that they will be undertaken.
Does the Minister know that the Department of Health and Children has not made a review since 2001 and will not produce a review under this programme until 2008? A full six years of the Department's spending, approximately €70 billion and half of our national income, will not be reviewed in value for money terms. Is this acceptable for such a programme? The Office of Public Works is in the same boat; no review will be completed by the OPW for seven years. Due to decentralisation, it has decided it is too busy to determine whether it is getting value for money. Is that acceptable for an office that will spend €3 billion during that time, which is a conservative estimate?
The promised reviews in the Department of Education and Science, which spends €8 billion per year, will cover €52 million or just more than 0.5% of its expenditure. Is this a sufficient review to determine whether taxpayers are getting value for money in that crucial area? We must see whether we are getting value for our money, but we can see everyday that we are not getting that value. The Minister must change the programme and focus it to a sufficient scale to make a difference.
The total amount covered by the reviews is in the order of €6.25 billion during the period concerned. When we introduced expenditure review initiatives previously, we found that one does not get the reports needed if one tries to cover every area of expenditure and assess the situation.
I have indicated that the roll-over reviews that were not done on time will be done in the initial phase of the programme, namely, the first six to 12 months. It was agreed that they would be done and I will make no excuses. In some cases, reviews have not proceeded because of changes in policy, if they are no longer relevant or if other issues took precedence. There has not been the type of output one would expect. I have introduced changes and outlined the various areas that should be addressed.
Some 14% of the Department of Agriculture and Food's budget would be reviewed, an exceptional 45% of the Department of Arts, Sport and Tourism's budget, 17% of the Department of Communications, Marine and Natural Resource's budget, 31% of the budget of the Department of Community, Rural and Gaeltacht Affairs and 10% of the Department of Defence's budget. Including the reviews not already undertaken by the Department of Education and Science, 10% of its budget will be covered. The total value of the reviews in the Department of Enterprise, Trade and Employment will be €231 million or 18% of its budget.
In the Department of the Environment, Heritage and Local Government, the amount reviewed will be €297 million or 12% of its budget. In the Department of Finance, that figure will be 28% or €31 million. In the Department of Foreign Affairs, the percentage will be 14%. In the case of the Department of Health and Children, the reviews to be conducted will address the allocation and utilisation of funds for acute hospitals, the equal opportunities child care programme and, in the context of mental health services, the efficiency and effectiveness of long-stay residential care for adults. The total cost of these programmes is €1.263 billion or 13% of the Department's allocation.
If we examined other Departments, the position would be similar. The amount is 10% or €211 million in the Department of Justice, Equality and Law Reform and €160 million or 38% of the budget of the Office of Public Works, including the provision of flood relief schemes and property management. The Houses have been asked to review 7% of their budget and the Revenue Commissioners will review 5% of their budget. The figures for the Department of Social and Family Affairs is 21% or €2.5 billion and the figure for the Department of Transport is 19% or €407 million. As the Deputy knows, large percentages of some budgets related to pay rather than services.
History does not teach the facts stated by the Minister. The Minister's group did not find that these reviews should be reduced in scale or focused. Indeed, the group found the opposite to be the case, namely, the reviews taking place were of areas that were too small and had no significance. The group found no evidence that the reviews made any impact on expenditure decisions. The history of the review process under the Minister's watch has been one of dismal failure.
The Minister's predecessor stated that he could not understand how so much money went into the Department of Health and Children, but nothing was ever achieved or none of the problems was solved. Between 2001 and 2008, €70 billion will be spent in that area without review. How can the Minister convince taxpayers that he is sitting shotgun on health spending and ensuring that value for money is achieved when he has agreed to this programme?
No. It has been suggested that one requires the expenditure review initiative to be the anticipatory reforms with which one would proceed. As the Deputy knows, we are carrying out considerable reforms in the health service.
We are getting improved outputs in the health service despite the Deputy's efforts to suggest that we are not. Were that the case, it would be a damning indictment of the thousands of people who work in the——