Derek McDowell (Labour)

This is the second debate in the House on the National Development Finance Agency. In October, we had statements on its annual report. That debate was pretty poor because so many Members did not have a notion what the agency was. I suspect many of them still do not. That is not terribly surprising because the role of the NDFA has changed since it was first mooted several years ago. The then Minister for Finance, Charlie McCreevy, came up with this wonderful idea before the previous general election to fund capital projects off balance sheet. It became clear after the election that the European Commission would not stand for it. The current primary purpose of the NDFA was then grafted on to the legislation.

I re-read the Official Report for the National Development Finance Act 2002 and it is still not clear to me why it was necessary to set it up as an independent agency within the National Treasury Management Agency. The then Minister, Charlie McCreevy, gave some explanation about a possible conflict of interest in financing. It did not make much sense to me then and it still does not, even after re-reading the Official Report four years later. The reality is the NDFA is a brass plate within the NTMA. It comprised 11 people when established on a non-statutory basis but now has 20 people providing expert advice.

One could be forgiven in thinking that the NDFA has been asked to carry out cost-benefit analyses of Government decisions for projects and, therefore, ensure better value for money. In one way it will ensure better value for money, but in another it will not. As it does not decide which projects are to be advanced, it cannot ensure better value for money. That is still a political decision for Ministers. If for example, the Minister of State, Deputy Parlon, decides to relocate hundreds of happy civil servants to Cavan and commissions a building there, the NDFA does not have the right to veto his decision. One may claim that is right.