Anne Rabbitte (Galway East, Fianna Fail) | Oireachtas source

I thank Senator Lombard for raising this Commencement matter. I am delighted to hear that the Minister, Deputy Michael McGrath, has made contact with him. I will read the script provided in response to the matter raised.

Delivering greater value for money in the expenditure of public funds is a key element of all public investment policy. Efficient public capital investment means quality investment decisions supported by robust evidence and analysis to maximise outcome for limited public resources. The management and delivery of investment projects and public services within allocation is a key responsibility of every Department and Minister. It is important to note that this is not a static space and public bodies are continually working to improve processes and frameworks to ensure value for money.

The public spending code is the tool used by Government to evaluate the consequences of the capital investment decisions it makes. The code was updated in December 2019 following an extensive consultation process involving engagement with over 150 public officials and a review of international best practice. The update code also incorporated lessons learned in Ireland on a wide range of projects such as those outlined in the PricewaterhouseCoopers, PwC, review of the national children's hospital, which recommended the following: the rules that govern public sector spending should be strengthened; the standards to which business cases are presented should be more clearly defined; and a central assurance and challenge function should provide a consistent challenge to and review of major projects throughout their lifecycle, which I think is the issue the Senator brings to the fore today.

As well as implementing these recommendations, the updated guidance better aligns with the realities of the project delivery, with a particular focus on improved appraisal, cost estimation and management. The public spending code is grounded in the principle of proportionality. The resources and time to be spent on project preparation must be commensurate with the nature, cost and complexity of the investment. All the evidence shows that the greatest impact on improving project outcome comes from the careful project preparation. The more work that is done on the earlier stages leads to more considered decisions on projects. At the same time, there is a need to balance project preparation with the imperative of delivering critical infrastructure. Accordingly, the update to the code streamlines the process for smaller projects. This can speed up project delivery. In addition, the code specifically refers to sectors such as housing and urban regeneration, whereby policy interventions can be appraised on a programme-wide basis without the need to assess every project on scheme individually.

The update of the code in 2019 highlighted the need for more structured scrutiny on major public investment projects, particularly in the areas of planned delivery, costings and risk. This is to ensure that the Government is making decisions with a full picture of the proposal, its costs, risks and benefits. The majority of public investment projects are delivered on budget and on time. There is a high level of professionalism across the various sectors. However, we have also recognised the higher risk profile of larger projects and introduced a new procedure for projects with an estimated cost of over €100 million in order to improve project outturns, avoid cost overruns and reduce the risk of delay in delivery.

The Department of Public Expenditure and Reform has put in place an external assurance process to provide independent project scrutiny at key decision stages. This will involve independent expert review of two key points in the project lifecycle under the public spending code - approval in principle and prior to tender - focusing on issues such as cost, risk and ability to deliver. This process will improve value for money and support funding Departments and Government with expert insight relating to project risks, delivery feasibility and robustness of costings, governance and procurement.

To support the external assurance process a new major project advisory group has been established to further strengthen project management. As a prerequisite to seeking Government approval for projects at the relevant decision gates, project proposals and external reviews will be scrutinised by the advisory group in advance of the decision to proceed. The new arrangements bring Ireland into line with leading international best practice and meet a recommendation of the IMF's public investment management assessment of Ireland. It should be noted that timelines associated with public spending code compliance are a fraction of the times required for compliance with a range of statutory requirements.

I am not sure if that response has answered the Senator's question.