Written answers
Thursday, 21 July 2011
Department of Finance
Consultancy Contracts
7:00 pm
Joe McHugh (Donegal North East, Fine Gael)
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Question 148: To ask the Minister for Finance if he will provide a report of the number consultancy reports commissioned by his Department between 1997 and January 2011; the cost of commissioning each report; if he will provide information on the implementation of recommendations set out in each report; and if he will make a statement on the matter. [22598/11]
Michael Noonan (Limerick City, Fine Gael)
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The information sought by the Deputy is as follows. It is not possible to provide all the information is a short time frame and more specific information will be provided to the Deputy in relation to the implementation of recommendations.
Company | Year | Cost | Description |
McCann Fitzgerald | 2008 | â¬48,400 | Advice on tender procedures and drafting of contracts for the provision of foreign travel |
McCann Fitzgerald/ Raymond Burke Consulting | 2003 | â¬54,450 | Advice on tender procedures and drafting of contracts for the provision of foreign travel |
Deloitte & Touche | 2001 | â¬97,000 | Annual Audit on the operation of travel policy by Government Departments and Office and Club Travel Ltd |
Deloitte & Touche | 2000 | â¬97,154 | Annual Audit on the operation of travel policy by Government Departments and Office and Club Travel Ltd |
Deloitte & Touche | 1999 | â¬74,413 | Annual Audit on the operation of travel policy by Government Departments and Office and Club Travel Ltd |
KPMG / Raymond Burke Consulting | 1998 | â¬36,900 | Advice on tender procedures and drafting of contracts for the provision of foreign travel |
Name | Date Published | Duration | Cost | Report carried out by |
Review of Arrangements for the Design of follow up Surveys of people participating in training courses under the Employment and Human Resources Operational Programme | Mar 2002 | 3 months | â¬40,207 | Capita Consulting |
Employment and Human Resources Development Operational Programme : Evaluation of Provision and Targeting of Measures | Jul 2002 | 8 months | â¬116,112 | Fitzpatrick Associates |
Evaluation of Public Transport Priority | Aug 2002 | 8 months | â¬96,674 | Indecon |
Evaluation of Investment in the Road Network | Aug 2002 | 8 months | â¬174,462 | Fitzpatrick Associates |
Evaluation of Eco âAuditing | Jan 2003 | 7 months | â¬72,067 | Economic and Social Research Institute |
Evaluation of the Equal Opportunities Childcare Programme 2000-2006 | April 2003 | 10 months | printed in-house | NDP/CSF Evaluation Unit |
Mid-Term Evaluation of NDP/CSF | Oct 2003 | 6 months | â¬401,115 | Economic and Social Research Institute |
Evaluation of Social Inclusion Co-ordination Mechanism | October 2003 | 6 months | printed in-house | Internal |
Review of Relevance of NDP/CSF Horizontal Principles to the OP Measures | April 2004 | 4 months | printed in-house | NDP/CSF Evaluation Unit |
Evaluation of the In- Company Training Measures | July 2005 | 10 months | In house | NDP/CSF Evaluation Unit |
Evaluation of water service investment in the NDP/CSF 2000 -2006 | Aug 2005 | 9 months | ⬠163,201 | Fitzpatrick Associates |
Update Evaluation of Community Support Framework | Nov 2005 | 4 months | â¬91,889 | Fitzpatrick Associates |
Name | Date Published | Duration | Cost | Report carried out by |
Expenditure Review InitiativeFirst Formal Report to the Minister for Finance by the Expenditure Review Central Steering Committee(for period June 2002 June 2004) | November 2004 | 9-10 months | printed in-house | The Expenditure Review Initiative Central Steering Committee, with assistance from the Expenditure Review Initiative Secretariat in the Department of Finance. |
Value for Money and Policy Review initiative Guidance Manual | March 2007 | â¬14,400 consultancy cost in respect of drafting certain aspects of the guidance manual. | Epsilon Consulting |
National Treasury Management Agency
( Inclusive of State Claims Agenct, National Development Finance Agency, National Pension Reserve Fund and
National Asset Management Agency)
2008
National Treasury Management Agency
Body | Name of Report or Review | Cost(ex VAT) |
National Treasury Management Agency | PwC Review of Technical and Operational Procedures in relation to the Prize Bond Scheme | ** |
2009
BodyName of Report or ReviewCost
(ex VAT)
National Treasury Management Agency | London Economics Report on Derivation of Long-Term Economic Value Adjustment Factors | â¬94,080 |
2010
BodyName of Report or ReviewCost
(ex VAT)
National Treasury Management Agency | Accenture Review of NTMA Corporate Services | ** |
National Pension Reserve Fund Commission
2008
BodyName of Report or ReviewCost
(ex VAT)
National Pension Reserve Fund Commission | WM Review of Fund Investment Performance | ** |
2009
BodyName of Report or ReviewCost (ex VAT)
National Pension Reserve Fund Commission | PwC Due Diligence Report on Bank of Ireland* | â¬650,000 |
National Pension Reserve Fund Commission | PwC Due Diligence Report on Allied Irish Banks plc* | â¬650,000 |
National Pension Reserve Fund Commission | Arthur Cox Due Diligence Report on Bank of Ireland* | â¬500,000 |
National Pension Reserve Fund Commission | Arthur Cox Due Diligence Report on Allied Irish Banks plc* | â¬900,000 |
2010
BodyName of Report or ReviewCost (ex VAT)
National Treasury Management Agency | Aksia Review of Hedge Funds Investment Strategy. | ** |
*These reports were commissioned at the request of the Minister for Finance in the context of the State's preference share investment through the National Pensions Reserve Fund in Bank of Ireland and Allied Irish Banks plc.
**Commercial confidentiality provisions in the relevant contracts preclude the publication of the fees paid in respect of these individual reports. However, the total costs (ex VAT) in respect of the 9 reports referred to above are â¬3,131,330.
Special EU Programmes Body
The Cost in relation to the reports and reviews carried out by the Special EU Programmes Body listed below would have been jointly funded by the European Union, the Department of Finance and the Department of Finance and Personnel. The majority of the Reports and Reviews were commissioned for the INTERREG IVA and PEACE III European Structural Funds Programmes, The EU funds 75% of INTERREG IVA programme costs and 67.5% of the PEACE III Programme costs, with Ireland and the United Kingdom providing the remaining funding.
The Special EU Programmes Body is responsible for the management of the PEACE III and INTERREG IVA Programmes which value some â¬333m and â¬256m respectively. In line with public expenditure requirements and as agreed with Accountable Departments, all applicants seeking funding under the Programmes are subject to a robust and defined assessment process. All applications meeting the basic eligibility criteria and seeking funding of over £500,000 will automatically be subject to a full Economic Appraisal (EA). These appraisals make up the majority of external reports and reviews commissioned by the Special EU Programmes Body.
Please note that there are a number of instances where a contract has been awarded to a provider for completion of a block of Economic Appraisals. Detail on the individual Economic Appraisals contained within these contracts is not available within the required timeframes but can be provided upon request.
The information presented is based on the Special EU Programmes Body Consultant Register as at 16 November 2010 and costs outlined within Tables 1-3 are based on the total costs stipulated at the time of award of contract. Should a contract complete under budget, this will not be reflected within the Tables. The Special EU Programmes Body appraisals make up the majority of external reports and reviews commissioned by Special EU Programmes Body.
Please note that there are a number of instances where a contract has been awarded to a provider for completion of a block of Economic Appraisals. Detail on the individual Economic Appraisals contained within these contracts is not available within the required timeframes but can be provided upon request.
The information presented is based on the Special EU Programmes Body Consultant Register as at 16 November 2010 and costs outlined within Tables 1-3 are based on the total costs stipulated at the time of award of contract. Should a contract complete under budget, this will not be reflected within the Tables. The Special EU Programmes Body estimates that the number of contracts to which this applies is negligible. Should however, further costs be incurred on a contract, these will be described as Annex Bs within Tables 1-3.
Table 1: External Reports and Reviews Conducted by SEUPB in 2008
Name of Report or Review | Cost £ | Cost ⬠|
East Border Region Multi-Annual Plan | 8,166 | |
North East Partnership Multi-Annual Plan | 11,103 | |
Centre for Sport & Interculturalism | 8,812 | |
Programme Branding Review | 40,000 | |
EA Annex B - East Border Arts Project (Original Annex A 95/04) | 3,466 | |
EA Annex B - Sharing a vision for our coastline (Original Annex A 39/06) | 2,879 | |
EA Annex B - Geographical Information Project (Original Annex A 45/06) | 2,726 | |
EPI Project | 3,525 | |
Destination North West | 4,230 | |
Cross Border Railway Cluster | 3,290 | |
NWEEC Waste Management | 3,290 | |
Impact Evaluation for the INTERREG IIIA Programme | 25,554 | |
Assessment & EA of the Multi Annual Plans submitted by COMET, ICBAN & NWRCBG | 17,927 | |
EA Annex B - Composting for the Mushroom Industry | 5,950 | |
Off Shore Electricity Transmission Grid Between Ireland, N. Ireland & Scotland | 6,991 | |
Economic Appraisal (EA) - Programme specification for the Creative Industries Sector | 5,611 | |
To undertake an independent assessment and review of the Project Kelvin. | 5,875 | |
Economic Appraisal to cover additional founds to the SYNERGY Project. | 4,112 | |
Addendum to the Economic Appraisal to cover additional funds to the Digital Media Works Project | 2,937 | |
To undertake an Economic Appraisal of the Sail West Project Under INTERREG IVA | 6,756 | |
To undertake an Economic Appraisal on PEACE III, Priority 2.1 project - Balloo Community Wetland Project - North Down Borough Council | 5,874 | |
To undertake an Economic Appraisal on PEACE III, Priority 2.1 project - Castlesaunderson - All Ireland Scouting/Jamboree Centre - Cavan County Council | 8,166 | |
Production of Common Chapter (North/South) Activity Report for 2006 | 18,682 | |
EA- Annex B - North East Partnership Multi-Annual Plan | 2,115 | |
East Border Region Multi-Annual Plan | 2,673 | |
EA & project assessment of 4 local authority peace & reconciliation action plans | 29,421 | |
EA & project assessment of 5 local authority peace & reconciliation action plans | 37,600 | |
EA & project assessment of 5 local authority peace & reconciliation action plans | 32,959 | |
Economic Appraisal Transforming Conflict in Border Communities | 9,635 | |
Analysis study of Protestant working class areas and the development of a Peace III project proposal | 20,327 | |
EA on actions contained within EBR's Collaboration Theme of their Multi Action Plan | 21,358 | |
EA on actions listed within ICBAN's Collaboration Theme of their Multi Action Plan | 15,030 | |
EA on actions listed within North West Region Cross Border Group's Collaboration of Multi Action Plan | 12,500 | |
Management of the successful dissolution of LSP companies seeking to close following P2 programme | 53,239 | |
EA Northern Ireland Prison Service application | 4,600 | |
EA of 9 PEACE III 1.1 projects | 33,120 | |
EA of 6 PEACE III 2.1 projects | 22,080 | |
Total ⬠| 785,897 |
Table 2: External Reports and Reviews Conducted by SEUPB in 2009
Name of Report or Review | Cost £ | Cost ⬠|
Design and implementation of a functional records management policy & system | 19,164 | |
EA on the Resource I/Reg IVA Project | 5,750 | |
EA Achieving Sustainable Councils | 5,750 | |
EA Connexions | 4,082 | |
EA Blackwater River Catchment Project | 5,750 | |
EA on Workspace at Enniskillen Airport/Innovative Enterprise Prog/HAATCH Projects | 14,950 | |
EA Annex B EA PEACE III Priority 1.1 Children and Young People Building Relations(original 70/07) | 1,028 | |
EA Annex B Conflict Transformation from the bottom up(original 75/07) | 2,937 | |
EA on business incubation support for Belfast/North Down/Sligo | 6,325 | |
EA on the innovation and growth programme for NEP which aims to build the success of previous Product Transfer programme | 3,565 | |
Establish a Rural Environmental Co-operative which will provide cross border catchment services to farmers and rural households in Lough Melvin | 6,325 | |
EA for proposed collaboration project from RNIB with NCBI and deafhear | 6,613 | |
EA Collaboration to fund a project aimed at building infrastructure to address current shortage of language service professionals working with the deaf | 4,025 | |
EA Collaboration between DHSSPS & DELHLG & NIFRS with six fire and rescue services in the border | 4,313 | |
EA Annex B - EA Success through Succession - (original annex A = 41/08) | 3,140 | |
EA Cooperation and Working Together - (original Annex A = 33/08) | 5,493 | |
EA On Diversity Across Border Projects | 4,025 | |
Ea Borderwise Cross Border Project | 4,542 | |
To undertake additional work required on the common Chapter Report | 920 | |
EA on two operations within marine tourism and angling development project | 3,795 | |
Annex B Create dvd to mark the closure of PEACE and INTERREG IIIA (original 87/08) | 8,321 | |
Development of SEUPB Website so it meets current best practice | 52,499 | |
EA Developing Governance in Transition/Vital Links/Int Childhood Network/FAIR/ The Most Project | 14,850 | |
Annex B EA BNcB | 3,482 | |
Business Plan for Peace III Priority 2.1 project Clones Erne East Sports Partnership | 6,037 | |
EA for an energy project | 5,750 | |
2 EA The Power of Possibility and Developing a Peace Building Infastructure | 8,395 | |
EA on PEACE II 1.1 Promoting Inter-Culturalism North/South | 4,600 | |
EA of the Construction Business project under the Enterprise Theme of ICBAN's MAP | 3,479 | |
EA of The Green Business Project under the Enterprise theme of ICBANs MAP | 4,594 | |
EA on the Cultural Tourism Network project form the COMET MAP | 4,477 | |
EA of 3 projects in the NEP MAP under tourism theme Biker Trip/Causeway Coast/Gobbins | 12,592 | |
EA on 3 projects under the Tourism Theme of the North West Regions Multi Action Plan | 9,487 | |
EA of 4 projects in the ICBAN MAP= Border uplands/ECO Tourism/Crossborder angling/Events and Festival Management Support | 16,503 | |
Review PEACE III+INTERREG IVA programmes performance | 74,115 | |
EA Annex B Borderwise Cross Border Project | 1,144 | |
EA Annex B Connexions | 1,064 | |
EA Annex B on Loughs Agency, Marine Tourism & Angling Project in Foyle and Carlingford | 3,770 | |
EA Annex B on the ifactory application | 1,880 | |
EA for East Border Region Partnership application under tourism | 12,075 | |
Completion of Sports Dev Plan for PEACE III Clones Erne/East Sports Partnership | 4,600 | |
EA Annex B Consultant to address comments from DETI on BNCB proposal under INTERREG IVA | 799 | |
EA on 2 FAIR projects/CAPABLE project/BOBCAT project | 6,635 | |
EA of one Co-operation Ireland project - Effective Choices Helping Ourselves | 3,450 | |
EA on the continuation of WAVE key services | 6,900 | |
EA Annex B To update Tradelinks II application | 1,552 | |
EA Annex B EBR Wider Cross border Regional Work | 1,573 | |
EA Intertrade Ireland/East Border Region/North West Region Cross Border Group | 4,600 | |
EA Annex B on the Resource I/Reg IVA Project | 1,088 | |
5 EA relating to The Administration Costs of the Cross Border P/ship Groups receiving funding under INTERREG IVA | 14,087 | |
Propose a methodology to the Member States on the appropriate methods and rates to be applied to facilitate simplification of management administration and control of ERDF funded organisations | 8,104 | |
To review the contract and completed works for the Strabane-Lifford Waterways | 3,237 | |
3rd Annex B EA on the Tradelinks II application-worked not covered in original TOR | 120 | |
EA Annex B Sailwest | 6,095 | |
2 EA Moving away from violence project and International network of youth centred public service providers project | 9,200 | |
4 EA Group A Forward learning/Sligo Vo Educ Comm/Rural Dev Council/NW Play resource centre | 14,778 | |
4 EA Group B Cooperation Ireland/Irish congress of Trade unions/PSNI/BCC Growing a learning city | 14,778 | |
Perception Surveys | 10,275 | |
EA Annex B North West Regional Sports campus | 548 | |
EA 2nd Annex B North West Regional Sports campus | 1,150 | |
2 EA Spatial Planning Analysis and Info sharing and Urban-village renewal | 7,100 | |
To undertake a needs analysis study on West Tyrone Voice and to develop a project pipeline in order to submit an application | 3,750 | |
Undertake Greenbook EA Settlement Regeneration Programme | 2,507 | |
Due Diligence Report on North and West housing Ltd | 5,623 | |
12 Green book economic appraisals | 61,922 | |
12 Green book economic appraisals | 53,820 | |
12 Green book economic appraisals | 63,705 | |
12 Green book economic appraisals | 41,193 | |
10 Green book economic appraisals | 67,850 | |
Commercial appraisal assignment of a company in the property/aircraft maintenance sector Enniskillen airport | 5,520 | |
EA Annex B Conflict Transformation from the bottom up(original 75/07)1st annex b=08/09 | 1,762 | |
12 Green book economic appraisals | 61,922 | |
Consultant to carry out the work and activities of working group one of the Peace Network | 25,500 | |
EA Annex B HAATCH/Enniskillen airport and the Innovative Enterprise Programme | 2,555 | |
Total ⬠| 1,040,280 |
Table 3: External Reports and Reviews Conducted by SEUPB in 2010
Name of Report or Review | Cost £ | Cost ⬠|
Review of the proceeds of the sale of Castlesaunderson lands by scout foundation-jamboree centre project | 587 | |
Preparation of proposal for the member states on the application of flat rate costs calculated by standard scales of unit cost to health sector project | 9,790 | |
In depth analysis of Major Grant Project, Project Kelvin, to address queries from European Court of Auditors. | 6,345 | |
Evaluation of PEACE III, Priority 1.1 Project Positive relations | 10,141 | |
12 Economic Appraisals | 54,990. | |
12 Economic Appraisals | 56,400 | |
12 Economic Appraisals | 54,919 | |
12 Economic Appraisals | 45,825 | |
12 Economic Appraisals | 57,208 | |
To undertake a review of Theme 1.2 of the PEACE III Programme | 19,385 | |
EA Annex B EBR Action for Bio Diversity | 1,329 | |
EA Annex B NWR Spatial Planning | 4,698 | |
EA Annex B EBR Energy and training and monitoring | 1,117 | |
EA Annex B NWR Urban and Rural Village renewal | 835 | |
EA Annex B NEP Causeway Connections | 1,469 | |
EA Annex B NEP Gobbins and Sliabh Liag | 2,291 | |
EA Annex B ICBAN Angling Project | 1,469 | |
EA Annex B ICBAN Eco Tourism Project | 1,469 | |
EA Annex B HATTCH, Enniskillen Airport. ICBAN's enterprise application | 4,821 | |
To undertake a review of the impact of the activities under each local action plan Theme 1.1 PEACE | 19,385 | |
Addendum to EA Castlesaunderson all Ireland scouting jamboree project | 1,762 | |
Addendum to EA of Orange Community Network | 1,410 | |
Development and design of SEUPB intranet system | 12,480 | |
Forensic Audit of a lead Partner- suspected fraud | 32,900 | |
Report to ascertain the impact of the removal of project partner from the Irish Peace Centres project | 4,641 | |
Perception and awareness survey | 11,039 | |
EA on Two sub-projects within the Lough Agency Marine Tourism and Angling Development Projects | 2,876 | |
Attitudinal Survey within the PEACE III Programme | 41,019 | |
Addendum to economic appraisal for Women into Public Life. | 1,243 | |
The Rural Enabler | 4,700 | |
Total ⬠| 515,402 |
Anglo Irish Bank
Consultancy charges outside the normal course of business in 2009 and 2010 (cash out basis and to Sept 2010) were as follows:
Name of the Report or Review commissioned | â¬m |
Restructuring Plans | 18.8 |
Nama related charges | 16.7 |
Legacy issues | 9.3 |
Liability Management exercise | 7.4 |
Redundancy & HR | 1.5 |
ELG Scheme | 0.1 |
CIFs Scheme | 0.2 |
Nationalisation | 1.6 |
Other* | 1.5 |
* other includes special items primarily consists of consultants hired to assist with the restructuring plans and NAMA related valuation costs.
Central Bank of Ireland
In addition to the reports listed above a number of reports or reviews were carried out by external parties on behalf of the central bank of Ireland (including the Financial Regulator for pre â October 2010) in the period 2008 to date in 2010. Details of the reports are included in the following tables:
2008
Name of Report or Review |
Financial Capability Study consultancy for 2008/09 |
Financial Capability Study consultancy for 2008/09 |
Loanbook analysis and assessment review |
Review of trading controls |
Consumer tracking research |
Report on calculating a consumer rebate |
Review of the Life Assurance Disclosure Regulations |
Consumer Research for Review of the Intermediary Market |
Total costs for 2008 ⬠4,295115 |
2009
Name of Report or Review
Review of Business Processes |
Review of Directors Loans |
Review of Banking System pre NAMA (at request of Department of Finance) |
Total Costs 2009 â¬778,724 |
2010
Name of Report or Review
Strategic Review of the Credit UnionSector in Ireland (requested by the Minister for Finance) |
Organisational effectiveness of financial sector regulators/Supervisors |
Due Diligence Report (at request of Department of Finance) |
Review of NAMA Asset Valuation Methodology |
Total Costs to date 2010 â¬2,031,423 |
In addition the consultative consumer and industry panels commissioned reports in 2008 to date in 2010. the reports cost â¬114,836 in 2008, â¬4,860 in 2009 and â¬4,599in 2010.
Consultancy Reports - Valuation Office 1997 - January 2011
2000 â 2001
Deloitte Touche
Methodology for implemenation of the Valuation Act 2001
161,000.00
Recommendations were implemented following receipt of the report and were reviewed in 2008 on completion of one complete Revaluation area.
2001 - 2002
Cap Gemini
Financial System Tender Evaluation and Selection Support
67,500.00
The recommendation was accepted and implemented.
2004
Price Waterhouse Coopers
Expenditure Review of the Valuation Office
20,010.00
The recommendations in this report were, where practicable, implemented
2005
Epsilon Consulting
Review of Internal Financial Controls and Procedures
14,000.00
The operations manual on Internal Financial controls and procedures was rewritten following receipt of the report.
2008
David Rainey
Rainey Report on Revaluation
13,853.24
All practicable recommendations in this report have been implemented, including the setting up this year of a central market analysis Unit to assist the National Revaluation project.
2009
Occupational Health and Safety Services
Review of Safety Statement and audit of safety management system
1,176.12
All recommendations on Safety Management Systems, Improvements in Preventative arrangements and the formulation of the Office Safety Statement were implemented.
Year | Company | Unit | Purpose/Report | Cost |
2001 | Price Waterhouse Coopers | Cen PPP Unit | Review of existing PPP structures in the Irish public sector. | 114,276 |
2003 | Adam Smith Consortium (incl. PWC) | Cen PPP Unit | Research on pensions issues in PPPs. | 12,100 |
2003 | Deloitte and Touche | Cen PPP Unit | Research on Public Sector Benchmark and Value for Money Comparison. | 143,990 |
2004 | IPA | Cen PPP Unit (NDP Information Office) | Report on Cohesion Fund | 14,250 |
2003 | IPA | Cen PPP Unit (NDP Information Office) | Compilation of Publications on Cohesion Fund | 14,250 |
2006 | ESRI | Cen PPP Unit (NDP Information Office) | Ex-Ante Evaluation of Investment Priorities for the NDP (2007-2013) | 356,941.60 |
2008 | Baseline | Cen PPP Unit (NDP Information Office) | NDP Identity Guidelines | 12,881 |
2008
Review Body on Higher Remuneration in the Public Sector (Report No 43) - â¬190,561
Job evaluation of posts in the public sector for the Review Body on Higher Remuneration in the Public Sector - â¬114,000
2009
Parallell Benchmarking Pensions Review - â¬32,805
Review Body on Higher Remuneration in the Public Sector (Report No 44) - â¬268,959
Aine Griffin/Marie Ralph:
Year | Consultant | Purpose | Payments | Area | Additional |
2005 | Hay Management Group | 204420 Review body on Higher Renueration in the Public Sector | 14,000 | Department of Finance | Amount contract for = â¬7,000 however â¬14,000 spent. â¬7,000 spent in year 2005 |
Eamann Phelan:
Maurice O'Connell, former Governor of the Central Bank and Financial Services Regulatory Authority, was asked to address, in October 2008, in the context of a review of the National Pensions Reserve Fund (NPRF), the following questions:
· Whether existing arrangements for automatic payment into the NPRF should be modified, and
· Whether the Minister for Finance, on behalf of Government, should be empowered to direct or influence the strategic investment policy of the Fund.
Mr O'Connell's conclusions were:
1. The performance of the NPRF since its establishment has been professional. In recent times it has suffered poor returns in exceptionally volatile conditions. This has been the experience generally of comparable investment institutions.
2. Where the national interest is concerned, it is appropriate that the Minister for Finance should be in a position to give directions on investment policy to the NPRF Commission, notwithstanding the requirement on the NPRF to secure the optimal financial return. This will require enabling legislation.
3. A top financial priority at this time is to contain the State's borrowing requirement which has exceeded earlier expectations by a wide margin. In this climate there is a case for suspending or adjusting payments to the Fund, especially as the cost of borrowing may well be higher than the Fund is likely to earn on its investments in the short term.
4. Any decision should also take account of the need to preserve the Fund, to the maximum extent possible, and the potential reactions from prospective international investors and credit rating agencies.
5. The options in relation to contributions to the Fund are to continue with existing arrangements or to adjust downwards or suspend payment in full on a temporary basis (preferably for the calendar year 2009 only). Valid arguments can be put forward in support of each option and the issues are finely balanced.
6. In view of the conflicting priorities and uncertainties that lie ahead, the more prudent approach at this time is to take a longer term perspective and maintain a contribution to the Fund, even at a lower level than is now required. Any change in existing arrangements will require enabling legislation.
7. The scope for non-cash payments, such as shareholdings, in making contributions to the Fund, should be explored further. In this context, it is for consideration also whether the legal prohibition on the Fund taking control or large stakes in individual companies should be amended.
8. The NPRF Commission should redouble their efforts at this time to find suitable investment opportunities in Ireland given the new economic realities.
Implementation of recommendations:
Not directly resulting from Mr O'Connell's report, under legislation enacted in 2009 and 2010, the Minister for Finance has power to direct the NPRF Commission to â
? invest in credit institutions (used to recapitalise AIB and BoI)
? buy Irish Government bonds
? provide cash to the Exchequer for capital expenditure until 2013
? ensure that it has cash or liquid assets available in the event of a direction.
?
In addition, the Minister for Finance has power, until 2013, to suspend or reduce the statutory annual Exchequer contribution of 1% of GNP to the Fund.
In relation to the investment of the Fund, the NPRF Commission has in the Fund's Discretionary Portfolio increased its commitment to Irish assets within the framework of its commercial investment mandate, including to Innovation Fund Ireland, water metering and infrastructure.
Cost of consultancy:
Nil.
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