Seán Fleming (Laois-Offaly, Fianna Fail)
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To ask the Minister for Public Expenditure and Reform the planned timescale for the sale of the National Lottery licence in view of the major infrastructure projects to be part funded from the proceeds; the costs he expects to be incurred in the sale process; the measures he will take to ensure that good causes will maintain their current level of benefit from the lottery; and if he will make a statement on the matter. [51620/12]

Brendan Howlin (Wexford, Labour)
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I announced on 4 April 2012 that the Government has decided to hold a competition for the next national lottery licence and that the licence will be for a 20-year period. Since April, my Department has carried out a considerable amount of preparatory work for the competition. It will be necessary to revise the National Lottery Act 1986. The Government has approved the general scheme of the national lottery Bill 2012, which has been sent to the Office of the Parliamentary Counsel to the Government. It is my intention to seek Government approval for the Bill in the current Dáil session and, subject to approval, the Bill will be published shortly afterwards. In tandem with the publication of the Bill, I will set out a scheduled timeline regarding the competitive process for the next national lottery licence.

I have previously indicated that a portion of the upfront payment will be used to help fund the national children’s hospital. While it is likely that some expenditure relating to the hospital project will be incurred in 2013, the greater part of the expenditure on that project will be incurred in subsequent years. Given the complexity of the process regarding the competition for the next licence, my Department engaged external advisers, as planned, to assist it in the process. Following a tendering process carried out by my Department, Davy Corporate Finance was awarded the contract. Davy Corporate Finance will be paid a fee based on the achievement of a number of key objectives during the process. I will set out the full fee cost once the process is completed.

In establishing the parameters for a competition for the next licence, it will be a priority to ensure that the conditions for maintaining and even for increasing annual funding for good causes are put in place.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Minister for his reply. The principal reason I put down this question was in light of comments from the Department of Health on its expectations regarding the new site for the national children's hospital. Most Members on all sides of the House are glad that a decision has been made. Moreover, they are satisfied with the new site at St. James's Hospital and look forward to it progressing through planning and tendering stages without undue complications. However, allowing for everything going well, the Department of Health has indicated it will be the very end of 2017 or early 2018 before the project has been substantially completed. If the Government obtains proceeds from the sale of the national lottery licence in 2013, what is to happen with the portion therefrom that were earmarked for the children's hospital? That was the essence of my question. Will such proceeds be ring-fenced to make sure they are available? Will such a fund be managed by the NTMA or will it be used for other capital infrastructure projects, with the Minister substituting money in 2018 when it is required? If the latter is the case - I do not express a view in this regard - the Minister essentially would be using the proceeds from the sale of the national lottery licence next year to fund capital investment projects in 2013, 2014 and 2015. However, in 2018, when the bulk of the money would be required for the national children's hospital, the Minister then would be obliged to fund it from current capital expenditure. If this is the case, the link between the sale of the lottery licence and the funding that will be required essentially will have been broken. I wish to ensure the maintenance of this link. While people may have a problem with selling off the national lottery licence, if it is explained to them that it is for the children's hospital, most will be happy with that concept. I even challenge those who are opposed to selling State assets to oppose that concept, with which I am happy.

Michael Kitt (Galway East, Fianna Fail)
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I call on the Minister to reply.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Finally, I refer to the fee structure for Davy Corporate Finance mentioned by the Minister. I presume that firm has got the contract and it should be a matter of public record at this point. There should be no competitive issues to be dealt with to prevent the provision of some details to Members.

Brendan Howlin (Wexford, Labour)
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I thank the Deputy for his views and obviously there are issues I am considering at present. There are a number of ways in which the Government might do this although it has not got any money yet. However, assuming the Government will receive a substantial sum of money next year, I am exploring whether it should be put into an escrow account, particularly for the national children's hospital or whether it would be more prudent, as the Deputy rightly stated, to substitute money I know I am getting. However, it is important to have a robust funding mechanism for the national children's hospital. I consider it to be important that people may be assured of that. Consequently, I am minded to ring-fence the money, as Deputy Fleming indicated I might be doing. I am minded to do that and have asked the Secretary General of my Department to explore options in that regard. I will be obliged to bring back the legislation to the House, when Members can go through it in some detail.

The only reason I have not given the Deputy the figures regarding the competitive tendering is that there are conditionalities associated with it. I will only pay on completion of these conditionalities, step-by-step, and I will keep the Deputy abreast in that regard.

Seán Fleming (Laois-Offaly, Fianna Fail)
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While I acknowledge the good spirit behind the Minister's comments, I am a little concerned by what he has just said. He has stated he is considering the options of what to do with the money now, quite a portion of which will not be required for a number of years. An escrow account to be managed by someone else has been mentioned. As for the sale proceeds from the national lottery, a significant portion of which everyone in Ireland understood clearly was for the national children's hospital, the Minister now has put on record he is considering whether other options exist, such as keeping the funds in an escrow account or using them in the interim and possibly substituting them with other funds. The Minister has broken what I consider to be the absolute link between the licence sale proceeds and the national children's Hospital. From the public's point of view, it is everyone's wish to help children, especially in the aftermath of the recent referendum. People were happy with that concept in that even if the national lottery essentially was to be privatised, at least it was being privatised for a good cause. However, the Minister no longer is as absolute about maintaining the link between the sale proceeds and actually using the direct funds. I acknowledge this is through no fault of the Minister, as because of the planning process and the new site, there now is a significant time-lag in respect of the project he had earmarked and which he probably thought would be somewhat more concurrent. This is a matter to which Members must revert.

Brendan Howlin (Wexford, Labour)
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I wish to be clear about this matter. First, I devised the strategy of ring-fencing because I was searching desperately to find where I could get a significant lump of capital to undertake this flagship project the nation desires, namely, the new national children's hospital. I did not wish to dip any further into the national capital programme and I note the Deputy has been highly critical of my earlier curtailing of it. Consequently, this option seemed to be a very good fit. It is not privatising because under European Union law, the Government is obliged to have competitive tendering for the licence in any event. It may well be that the current licenceholders will win that competitive bid on their own or in a new alliance with someone else. That is one possibility and I do not wish to prejudge any of that. In fact, I have no hand, act or part in the process and I have made sure of that from the outset.

However, my point with regard to an escrow account or a ring-fenced account is that I wish to ensure this sum of money is available to build the children's hospital. How that is to be done is a work in progress because the Deputy is correct. I assumed, when I made the decision, that planning for the original site would go swimmingly and that construction would be under way next year. I believe the country would have applauded getting on with it, whatever one's views about whichever site might be. Ultimately, I am agnostic in respect of the site but I desire the construction of a national children's hospital for the benefit of all the children of the country.