Caít Keane (Fine Gael)

Cuirim fíor-fáilte roimh an Aire chuig an Teach. Tá mé ag ceapadh go gcuirfimid a ainm ar an gcathaoir seo. Tá sé sa Teach go minic. I welcome the Minister to the House to discuss this very important Bill. The Minister has outlined the disbanding of the Dormant Accounts Board and the transfer of its legislative functions to the Minister for the Environment, Community and Local Government.

The Dormant Accounts Acts provide for an annual transfer by credit institutions and insurance undertakings of moneys in accounts determined to be dormant into the Dormant Accounts Fund. Since its establishment in 2003 to the end of February 2011, the transfers to the Dormant Accounts Fund have totalled approximately €589 million, which includes interest earned of approximately €35 million. Prior to the establishment of that fund, that interest earned was the property of the various financial institutions, so it is a plus that the Dormant Accounts Fund was initiated in the first instance. Funds reclaimed in that period by account holders amounted to approximately €208 million.

Following the enactment of the Dormant Accounts (Amendment) Act 2005, decisions on disbursements from dormant accounts are now the responsibility of the Government. The Dormant Accounts Board was established in 2006. Its role is to provide independent advice in respect of Government decisions on dormant accounts funding. The function was transferred to the Government in 2005, while the board has since only acted in an advisory capacity. We always hear that Ministers have enough advisers at this stage. There are ten Departments involved in the disbursement of those funds, so there is advice coming to Ministers from every quarter and every agency on the disbursement of this fund.

The 2001 legislation provides for the administration of unclaimed accounts in the various institutions 15 years after they were established, and the funds are then disbursed to the various projects. These projects are in economically and socially challenged areas, or for people with disabilities or who are educationally disadvantaged. To date, more than €140 million of the Dormant Accounts Fund has been committed to projects around the country. The funding has been available over the years, and the Bill does not propose to change any of the underlining principles of the Dormant Accounts Fund. Those principles, which are admirable, will remain unchanged. They will assist the people who they were intended to assist in the first instance; those people who are economically, socially, or educationally disadvantaged, or those who have a disability. Future disbursements will have regard to those areas, and the priorities and policies of the Government will be maintained in that light.

The Bill strengthens the Government and Oireachtas oversight of the area, while at the same time simplifying administrative arrangements and the associated process in respect of grants awarded from the Dormant Accounts Board. The Minister pointed out that the amount coming into the fund has decreased since its establishment. In 2003, it was around €200 million, whereas it is now under €50 million. Education of the people in respect of claiming funds and ensuring that there are no dormant accounts would also have been responsible for this decline. In its 2010 report, the board recommended new sources of funding. Perhaps the Minister should look at different agencies for such funding. I believe a reply was given at the time that it was not the time to put more money into the fund and that it would be appropriate to wait for better times. That was the statement made in early 2010, but we know that these are not better times now.

In July 2009, the special group on public service numbers and expenditure programmes recommended the discontinuation of the Dormant Accounts Board, forecasting an annual saving to the exchequer of approximately €1.7 million. That money could be put to good use by Departments. Therefore, it would be a logical step to disband this board in an orderly fashion, and this Bill provides for that. A previous speaker spoke about disbanding a quango. The Minister thanked the board members for the work they have done, and they have outlined the various steps and methodology for the disbursement of this fund, and this will continue.

One area of existing legislation that concerns me is that the Government is liable to disburse funds to the original dormant account holders after the stipulated 15 years in which there has been no transaction on the account. If a large number of dormant account holders were to reclaim their money simultaneously and these claims amounted to more than 15% of the total Dormant Accounts Fund, as provided for in the legislation, the State coffers could be seriously drained and this must be addressed. The legislation states that the money may be reclaimed by the account holder at any time. The previous speaker alluded to a scenario where the account holder is dead, but this is not stipulated in the Bill and we do know that account holders and beneficiaries of accounts might be in dispute. Therefore, it should be put in the Bill that the beneficiary of the account is the person that reclaims the money.

According to section 22 of the 2001 Act, the Minister is empowered to appoint inspectors to ensure compliance by the financial institutions with the Act. In its 2010 annual report, the Dormant Accounts Board expressed concern that up to that year, no inspectors had been appointed. We have plenty of inspectors, but they are obviously not inspecting this fund, which further exemplifies the blasé approach to financial regulation that was taken in recent years. I hope the Minister ensures that these inspections take place, because it is up to the inspector to ensure that the banks inform the people who have the accounts that they are approaching the 15 year threshold for the creation of a dormant account. There does not have to be an inspection of every institution, but it should be done on a spot check basis.

Ultimately, the Dormant Accounts Board does not have any executive functions but serves to provide independent advice to the Government and to act as a critical appraiser relating to Government decisions on the fund. According to the regulatory impact analysis of this Bill, the functions of the board are largely historical and its role has been substantially reduced since the enactment of the 2005 Bill. That is very welcome.

Will the role of Pobal continue in the administration of the fund? Perhaps it could be subsumed into the Department if it cost more to administer it that way.