Written answers

Wednesday, 26 February 2014

Department of Public Expenditure and Reform

State Properties

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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11. To ask the Minister for Public Expenditure and Reform the protocol and procedure for the sale of public buildings which must be adhered to once a decision has been made to dispose of the property, including whether policy differs depending on which public body is selling the property; and whether there are uniform guidelines. [9364/14]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The powers and functions relating to property which previously vested in the Minister for Finance transferred in July 2011 to the Minister for Public Expenditure and Reform under the Ministers and Secretaries (Amendment) Act, 2011 and S.I. No. 418/2011 Finance (Transfer of Departmental Administration and Ministerial Functions) Order 2011.  The powers in relation to State property generally are set out in Sections 9, 10 and 11 of the State Property Act, 1954.  The powers in that Act relate to vesting, management and disposal of State land, but not purchase of land which is dealt with under the Ministers and Secretaries Act.  These powers and functions are further elaborated in guidelines contained in Public Financial Procedures and the Guidelines for State Bodies.  Practice may also be affected by specific legal provisions in particular areas, such as the legislation that governs NAMA which, of course, is mainly engaged in disposing of loans, and that governing local authorities. 

Bearing in mind the guiding principle to maximise the benefit to the taxpayers, the general approach to the management of assets, including property, held by the State and its agencies is that it is the responsibility of each agency to optimise value.  Public Financial Procedures and the Guidelines for State Bodies impose requirements which should result in agencies having accurate, reviewable records of their property holdings and valuations.  Together with having information about their property requirements and the management of their properties, they should be in a position to dispose of assets they judge to be surplus to their requirements in a manner that maximises public utility; in the vast majority of cases, this means for the best price achievable.  

The general rule set out in Public Financial Procedures is that Departments are required to have asset management systems in place (Section B1.2 paragraphs 22-25) which ensure that assets are acquired only when needed, are adequately controlled and maintained, are properly safeguarded and disposed of, and that utilisation is monitored. The 1994 Guidelines on Public Procurement, or Green Book, at paragraph 1.2 states that the disposal or letting of property should be dealt with by competitive tendering or by auction in order to ensure that disposals are both transparent and likely to achieve a fair price.

This approach is also reflected in the Code of Practice for the Governance of State Bodies.

"It should be standard practice that the disposal of assets of State bodiesor the granting of access to property or infrastructure for commercialarrangements e.g. joint ventures with third parties, with an anticipatedvalue at or above a threshold level of €70,000, should be by auction orcompetitive tendering process, other than in exceptional circumstances(such as a sale to a charitable body). The method used should be bothtransparent and likely to achieve a fair market-related price."  (Paragraph 5.1)

The Code also states:"The Board should have a formal schedule of matters specifically reservedto it for decision to ensure that the direction and control of the body isfirmly in its hands (some of these matters may require Ministerialapproval and this should be noted). This schedule should include, atleast, the following:significant acquisitions, disposals and retirement of assets of theState body or its subsidiaries. The schedule should specify clearquantitative thresholds for contracts above which their approval isrequired";

A range of measures to improve property management in the public service is set out inAccommodating Change Measuring Success, the Government's Property Asset Management Plan published in July 2013.  Within this overall context, further work on standardising the detailed approach to management of property disposals aimed at further improving outcomes is currently underway under the auspices of the Steering Group on Property Asset Management, led by the Office of Public Works.

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