Seán Sherlock
Question:6. Deputy Sean Sherlock asked the Minister for Public Expenditure and Reform his plans to increase off-balance sheet capital investment. [26209/17]
Other Questions
Infrastructure and Capital Investment Programme
Permission has been given to Deputy Joan Burton to take this question.
The Minister could just continue to tell us about how he plans to increase off-balance sheet capital investment. In particular, will he identify some of the mechanisms he proposes to use? Is it special purpose vehicles? He has spoken about other finance mechanisms and obviously this is one of them. I would be grateful for this information.
Over the coming years, the Government intends to increase capital expenditure, as clearly outlined in our capital plan. When account is taken of the additional €5.14 billion now committed to capital investment over the period of the plan, capital expenditure will reach 11% of gross voted expenditure in 2021, or almost 75% higher than we were in 2016. We do need to be careful to avoid stoking construction price inflation by increasing expenditure without paying attention to the capacity of the sector to undertake additional projects.
Public infrastructure is primarily funded by direct Exchequer financing, which is classified as on-balance sheet as the Deputy knows. Off-balance sheet funding of capital projects is also possible in certain circumstances, primarily through the use of public private partnerships, PPPs. They offer an alternative model for delivering infrastructure that can facilitate the delivery of additional capital projects and can be effective in some circumstances. However, the long-term nature of the financial commitments arising under PPPs requires that the use of such arrangements must be carefully planned to ensure they are used to address needs that are not likely to change over a 25-year period, and do so in a way that is sustainable. I have asked the Department, as part of the mid-term review of the capital plan, to review our experience of using them and to consider their scope for further use to complement the direct provision of infrastructure using Exchequer funding.
A senior group has been established, comprising officials from Departments with experience of procuring projects by PPP, together with the Department of Finance, the National Development Finance Agency and Transport Infrastructure Ireland.
Additional information not given on the floor of the House
This group is reviewing past experience with PPPs and its report, once complete, will provide an evidence-based analysis of the potential for further use of PPPs, and concessions, as a procurement option for the delivery of additional capital infrastructure. Assessing the affordability, sustainability and value for money of PPP procurement will be key elements of the group's work.
There is already a significant number of projects being delivered on an off-balance sheet basis under the Government's PPP programme. While such off-balance sheet structures have a role to play in enabling additional infrastructure to be delivered in parallel with direct Exchequer provision, they are not a panacea and involve significant financial commitments on the part of the State for many years to come. The scope to use such off-balance sheet structures to deliver capital infrastructure is also somewhat constrained under the latest EUROSTAT rules. However, the Government remains open to the possibility of using further off-balance sheet options to supplement direct Exchequer investment and assist with the delivery of critical national infrastructure on a timely basis, where this is considered suitable and provided that this can be done on a sustainable and affordable basis.
The report of the expert group will help inform a final decision on how to proceed with off-balance sheet PPPs in the context of the new long-term capital plan to be published later this year.
To continue the point on housing and the infrastructure required for it, I could bring the Minister to an area he knows well in my constituency, Hansfield in Ongar. Over the past ten years, planning permission has been given for another 3,000 houses there, in a very desirable area, where most of them would be for purchase. Small-scale building is happening there at present but some investment in road infrastructure was required. These 3,000 houses on the west side of Dublin would make quite a difference to supply. There has been much school building in the area also, yet there is no funding for a small element of an access road and a bridge over the canal. This is very difficult to understand now that things have improved so much. I appreciate the volume of capital investment has increased, but it is nothing like what is actually required. I do not think anybody in government has really got a handle on how to ramp up the volume and the amount of infrastructure that is required.
I am very strongly aware of the need to increase capital investment. I know the Deputy understands these matters very well, and the choice we have is regarding how we do this in a way that does not cause the price of what we are looking to build to increase so we end up building projects at a higher cost than we should. We have been down that path before. To do this, it is important that we pace the increase of capital expenditure in a careful manner. With regard to what the Deputy said about Hansfield, at the end of last year we set up the local housing infrastructure activation fund there, and the main reason the fund was set up was to provide co-funding to local authorities to provide transport infrastructure and utilities to allow private development to occur. It would appear the fund should have been able to meet the need the Deputy has just spoken about. I will find out why it did not do so, because 3,000 homes is a huge number of homes in an area that would be well capable of sustaining them. I will respond to the Deputy on this matter after this step.
I hear the voice of departmental officials stating what we got wrong the last time was excessive cost increases and prices that ran out of control. With the establishment of the Department of Public Expenditure and Reform specifically as a management oriented body alongside the Department of Finance, the Minister should have better ways of being able to control expenditure. Foreign direct investment is interested in investing in various parts of the country, but it is not possible at present to rent at any reasonable price. Rental prices all over the Dublin region are at Hollywood levels. We are talking about a two-bedroom apartment costing well over €2,000 month. Almost no other country in Europe has this type of price. What about a bit of price control or rent control so it is possible to control and influence prices? As I stated, I hear the voice of the Department officials stating this was our mistake the last time and we will avoid it this time.
It is not the voice of officialdom making these points, it is me. If we were in a situation where we ended up paying more for projects than we should, the Deputy would be in here immediately criticising me for doing it. I will not allow the taxpayer to be in that place. If we look at what we are planning to do, from a capital expenditure point of view, as it is this year we will invest €4.5 billion in capital investment. By 2018, with none of the changes to which I referred, that figure will increase to €5.3 billion and the year after it will increase to €6 billion. There is a steady pace of increase in capital expenditure to meet the needs to which the Deputy is referring, and a huge amount of work has got under way to make sure we provide the type of office space to allow companies and investors be present and create jobs in Ireland. I know what more we need to do on housing, but this is the reason we have a fund of €5 billion in place to try to at least deal with the public housing element of our challenge.
Information and Communications Technology
Dara Calleary
Question:7. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the progress made under the public service information and communications technology strategy; the amount of money spent on the strategy; the Departments to which it has been rolled out; if he is satisfied that the investment to date in 2017 has represented value for money; and if he will make a statement on the matter. [26202/17]
The number of very serious IT outages, which affected people's information in recent weeks and months, has highlighted the importance of a proper public service technology strategy, particularly given the amount of data and information it controls. I want to discuss with the Minister the progress of the strategy, what the Government is prioritising in terms of investment in the strategy and how it will impact.
I thank the Deputy for the question. The public service ICT strategy was approved by Government and launched in January 2015, and is specifically aligned with the objectives of the public service reform plan and the goals of the Civil Service renewal plan. The strategy aims to provide a framework for the delivery of greater efficiencies in public service ICT delivery and administration, with better outcomes for citizens, businesses and public servants.
The strategy identified five key strategic objectives setting the future direction for innovation and excellence in ICT in the public service. These are build to share, digital first, data as an enabler, improve governance and increase capability.
The strategy encompasses all Departments, and the Department, through the Office of the Government Chief Information Officer, OGCIO, is working with Departments to progress the 18 step action plan for the strategy, which the Government chief information officer agreed with the Civil Service management board in October last year.
The ICT advisory board meets quarterly to oversee the implementation of the strategy and action plan. The action plan is fully mobilised and working groups are making good progress in each of the areas identified.
The Department has spent €9.7 million on implementing the strategy to the end of the first quarter of 2017 and I am satisfied that the investment to date in 2017 represents value for money. This expenditure represents both current and capital investment in building and supporting infrastructures such as the Government networks service and the build to share common applications and Government cloud platforms.
We will soon launch a digital portal to make it easier for citizens to find Government services online.
The Deputy may wish to note that, through the OGCIO, we are developing plans to rationalise the provision of infrastructure services across Government, thereby driving efficiency and strengthening newer areas of ICT provision, such as cyber security.
We also are planning for a highly energy efficient State data centre to host data and systems not suitable for hosting in the cloud.
In addition, we are examining options to professionalise the ICT resource across Government to ensure we maintain a sustainable and strong balance of internal and external input into the delivery of public services.
With regard to the security breaches that have occurred, what work is being done to ensure that citizens' information is protected to the highest degree possible? Is that a function of each Department or is it a function of the OGCIO? Second, the Minister of State referred to the cloud. How will he ensure, as we move towards cloud storage, that information contained in the cloud will be secure?
The OGCIO is based in the Department of Public Expenditure and Reform. It is implementing a multi-layered approach to cyber security and protecting ICT systems, infrastructure and services. The threat landscape is constantly evolving and significant effort is expended on continuing to enhance and strengthen ICT security to mitigate against emerging threats, risks, vulnerabilities and cyber security issues. In addition to deploying intrusion protection systems, software vulnerabilities are managed by maintaining up-to-date versions. The OGCIO also continues to work closely with the national cyber security centre, NCSC. The NCSC is a division of the Department of Communications, Climate Action and Environment and encompasses the State's national governmental computer security incident response team.
In addition, as part of the public service ICT strategy, consideration is being given to the formation of a highly skilled cyber security team as a shared services model for Departments. Such an approach will give greater assurance to the Government and citizens on the security of the State's systems and data. As regards cloud computing, a public cloud model is being used. We have a private cloud model as well and we are developing a business plan for a national data centre for sensitive government information.
With regard to those models, what importance is being attached to the security of the information? Have there been any major or significant cyber attacks on a Department or on Government information in the course of the last 12 months?
It is incredibly important that we can maintain the security of information and data that we host in government systems. That is the reason we are examining this proposed new model for a team to deal with specific cyber security threats and to resource that out across Departments.
As regards attacks made on the system over the last 12 months, there was a denial of service attack on a couple of Departments last summer. These are becoming more frequent. More recently, there was a problem with a malware virus system across some Departments but information is still being collated as to the source of that malware interruption. There is ongoing work taking place at present because of the increased threat of cyber security attacks not just in Ireland but across the world. This a key part of the strategy or focus of the OGCIO as it seeks to implement the new strategy for public service reform using data and ICT strategies that are already located within existing Departments. We are making sure that a common standard is being driven from the centre by the OGCIO in the Department of Public Expenditure and Reform.
Public Private Partnerships
Question No. 8 is in the name of Deputy Michael McGrath. Permission has been given to Deputy Dara Calleary to take this question.
Michael McGrath
Question:8. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform his plans to review the current 10% limit on public private partnerships; his views on whether the 10% rule and the controls and systems in place are sufficient to ensure that public private partnerships are used for the appropriate projects; his further views on expanding the PPP programme for appropriate projects; and if he will make a statement on the matter. [23532/17]
This is probably a continuation of the discussion the Minister had with Deputy Burton. More importantly, it focuses on the 10% rule in public private partnerships. The Minister's colleagues, the Minister for Housing, Planning, Community and Local Government, Deputy Simon Coveney, and the Minister for Social Protection, Deputy Leo Varadkar, have been promising infrastructure projects like snuff at a wake around the country in the last two weeks. Have they spoken to the Minister about how they will be paid for?
As I said earlier, PPPs offer an alternative way for delivering infrastructure. The question refers to the 10% rule and whether we are seeking to review that. The current requirement is that, taken together, future costs in respect of PPPs should not pre-commit more than 10% of the overall aggregate capital funding projected to be made available to future Governments in an individual year. Against this background, we must formulate a clear view on the role PPPs can play to ensure they are useful in delivering additional infrastructure, but doing so in a way that is affordable.
One of the challenges we must deal with when we debate the merits of PPPs is that because the funding is not located on a country's balance sheet a misconception begins to form that the money does not have to be repaid. However, it does. I can give the Deputy some of the figures relating to this so the House will be aware of the scale of repayments for PPP projects. The latest projections available to the Department indicate that the cost of unitary payments in 2017 will be €240 million. It will increase year on year to €340 million by 2021 and the average cost for the 14 years after that will be €300 million per annum. The other side of that coin is that those bullet payments pay for the maintenance of the asset. They do not pay just for its construction but also for its maintenance. This is particularly relevant with regard to a road or a school building.
We are reviewing their use with the process I outlined to Deputy Burton. I am aware of the costs that exist. Just because they might not reside on the sovereign balance sheet in a given year does not mean they do not have consequences for the Exchequer in the future.
Yes, there is a cost and these moneys must be repaid. We all accept that. However, consider the opportunity costs of not having proceeded with some of the projects that PPPs are currently funding. The costs we repay include maintenance of roads and so forth, so we must do something. I share Deputy Burton's concerns about the Minister's remark on whether we have capacity to deliver and whether there will be construction cost overruns. That is what the Department of Public Expenditure and Reform should be about. Again, I point to the need for a centralised infrastructure planning unit that should be able to negotiate all of that. However, we must have some indication of the Minister's views on PPPs ahead of the capital plan review and the Minister announcing that. In that context and in terms of proposals for PPPs, representatives of Transport Infrastructure Ireland, TII, appeared before the Committee on Budgetary Oversight some weeks ago and said their hands are tied in respect of developing new road projects because of the limitations on PPPs. We must have a signal one way or the other so that if the Minister intends to relieve this limit people can start planning and infrastructure can be put into the pipeline. If not, we will have to pursue other avenues for funding.
I will provide guidance on the role of PPPs as part of the capital plan review that is under way to allow agencies, if I believe it is appropriate, to deliver projects via the PPP model. The Deputy said he was concerned about my view on prices going up and cost overruns. One of the roles of my Department is to ensure that taxpayers' money is being used in the right way and that we are avoiding over-paying for the delivery of either services or capital projects. I make no apologies for saying that I wish to ensure that if we increase capital expenditure we will not end up paying a higher cost for the same number of projects we are currently planning to carry out. That outcome would not be acceptable to me or the taxpayer.
I do not want that outcome either, but I am anxious to see a pathway to deal with the serious infrastructure bottleneck facing our country in so many areas such as housing, roads, ports and airports, which is being discussed at every hearing of the Committee on Budgetary Oversight. We all want the country to develop economically, but our current infrastructure is pulling down our chances of economic progress. In particular, it is pulling down the chances of regional economic progress. We must start thinking outside the box. I welcome the steps that have been taken with the European Investment Bank, EIB, in recent weeks. They must be given more urgency. However, we must provide some type of signal. The Minister must provide a signal that the Department and the Government understand the infrastructure cliff we are facing in this country and that they will stop us from driving over it.
On understanding the cliff, before the summer I will publish an analysis of where we are with the stock of capital investment in the country and our view on changes that need to be made in the future. On the quality of existing infrastructure, of course, I understand our needs pertaining to housing and higher education. The Deputy gave some examples of what he believed to be infrastructural opportunities. I point to the example of the progress made in Dublin Port with the development of the Alexandra Basin project, a project that is, incidentally, co-funded by the European Investment Bank. I point to the work that has been under way at Shannon Foynes Port to improve its capacity to handle a larger amount of stock and vessels than it was capable of handling up to this point. I also point to our airports and the success Dublin, Cork and Shannon airports have had in financing upgrades they needed to their own infrastructure and the fact that the Exchequer has been able to contribute to the upgrading of infrastructure there and at many other airports all over the country. There are needs, of which I am aware and which I will recognise, in particular, later in the year. In many cases, however, we have infrastructure that is meeting the economic needs of the country.
State Bodies Expenditure
Catherine Connolly
Question:9. Deputy Catherine Connolly asked the Minister for Public Expenditure and Reform the nature, details and value of all accommodation contracts entered into between the OPW and Caranua; and if he will make a statement on the matter. [26099/17]
Thomas Pringle
Question:24. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the agreement between the OPW and Caranua on the renting of office space; and if he will make a statement on the matter. [26101/17]
Clare Daly
Question:41. Deputy Clare Daly asked the Minister for Public Expenditure and Reform the agreement between the OPW and Caranua on the charging of rent for the use of office space; the details of same; and if he will make a statement on the matter. [26231/17]
Will the Minister clarify the arrangement between the Office of Public Works and Caranua? What contract, if any, has been entered into? What are its details and value? The Minister is fully aware of the controversy about Caranua taking on a rent obligation that it did not have before. It was set up in January 2013 and did not pay rent until recently. Will the Minister clarify the position?
I propose to take Questions Nos. 9, 24 and 41 together.
The Commissioners of Public Works advise that the agreement in place with Caranua for its current accommodation in Frederick Court, Dublin 1, is an administrative arrangement by way of a simple exchange of letters between them and Caranua. It details a rent contribution of €106,000 per annum, with a commencement date of 1 June 2016.
As the lease on the Frederick Court building expired in 2016, the Commissioners of Public Works is disposing of the property and in discussions with Caranua on its future accommodation needs. It has offered it space in newly leased premises off Talbot Street, Dublin 1. This was another option for Caranua, given that it had carried out its own research to find alternative accommodation. It confirmed its acceptance of this space to the commissioners and the arrangement is, again, by way of an exchange of letters. The due proportion of rent to be paid by Caranua amounts to €188,589.55, plus VAT, per annum. The increased rent arises from the provision of a larger area of accommodation for Caranua.
Will the Minister clarify why Caranua will have to pay rent on moving into the leased premises associated with the Office of Public Works, OPW? Will he clarify that the OPW is leasing the existing building? What was it paying for it? Caranua was in it for three years and one month without ever paying rent. What has changed that now obliges it to pay rent? Furthermore, is the Talbot Street premises the one identified a number of years ago that had been refurbished in part with funds from the Caranua funds and into which Caranua did not move at the time?
The one question I cannot answer for the Deputy concerns the arrangement involving the OPW for the current building. I do not have the information required but will find it for her.
On the other question the Deputy asked me, the Department of Education and Skills replied to a parliamentary question on 9 May 2017 addressing the responsibilities of Caranua as an independent statutory body and, in particular, the procurement of its accommodation and the meeting of related expenses. The reply made it clear that Caranua was an independent statutory body and, therefore, would be expected to procure its own accommodation and meet related expenses. Section 30 of the Residential Institutions Statutory Fund Act 2012 provides that all expenses incurred by Caranua under the Act shall, subject to the approval of the board, be charged to an investment account to the benefit of Caranua. That is why it is expected to meet its own accommodation needs and pay the rent therefor.
On the Deputy's question on the role of the OPW, its remit is to provide accommodation for central government bodies. There are several agencies outside that remit that recoup rent to the OPW for space provided for them. In many cases, this relates back to the legislation under which an agency was established in that there was provision made for the agency to fund its own property requirements.
On the question the Deputy asked me about the accommodation on Talbot Street, I will find the information make it available to her.
I appreciate that the Minister is going to clarify that aspect. The question I am asking which he is ignoring, although perhaps not deliberately, concerns the fact that we really have gone around in circles. Other Members have tabled questions similar to mine such is the concern about Caranua moving into rented premises. The figure we were given was €272,000, to include VAT, year after year. Why is the legislation and the specific section the Minister mentioned now being cited when it was not used since establishment in March 2013? The organisation was never charged rent. What has changed such that it is now being charged rent, particularly when the fund is dwindling? Second, no business case has ever been made, even though the Department of Education and Skills asked for one. Third, the number of applicants dwindled to a couple of hundred in 2016. Why, therefore, does Caranua need bigger accommodation?
I am not ignoring the Deputy's question, nor am I attempting to do so. She asked me about the rental agreement between Caranua and the Commissioners of Public Works. I have provided for her all of the information available. On why Caranua is being asked to pay rent, this is a matter between the board of Caranua and the OPW. If the latter is providing accommodation for agencies that are not central government Departments, there is an expectation that rent will be paid. I will determine whether I can, through the OPW, find the answers to the other questions the Deputy put to me. I am sure I will and I will make the information available to her. I have, however, answered the question she put to me.
Flood Relief Schemes
Aindrias Moynihan
Question:10. Deputy Aindrias Moynihan asked the Minister for Public Expenditure and Reform when flood defence construction works will advance in Baile Mhúirne and Ballymakeera. [26237/17]
I have repeatedly raised the concerns of residents in Baile Mhúirne and Baile Mhic Íre about the risk of flooding from the River Sullane. I have raised the matter a number of times in the Dáil Chamber. The residents need to see progress on the scheme. There was an exhibition in 2011 and designs were to be advanced during 2014. The questions about freshwater pearl mussels were addressed last year, yet there does not seem to be a plan in place. What is the up-to-date position? How soon will the much needed scheme advance towards construction and when will residents in Baile Mhúirne and Baile Mhic Íre have peace of mind regarding the risk of flooding?
I am advised by the Commissioners of Public Works that the Baile Mhúirne and Ballymakeera scheme is at outline design stage, on which the preferred options for the scheme are being finalised. The River Sullane has a history of containing freshwater pearl mussels which have protected status as an Annex II listed species under the EU habitats directive. An environmental survey was carried out to establish the status of the population and the likely impact of works. Given the impact the proposed works could have on the freshwater pearl mussel population, a solution to avoid damage was illustrated and submitted to the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs. The submission was approved, allowing the scheme preparations to progress to site investigations where the results will inform the preferred options for the scheme.
To respond to the Deputy's specific question, tenders have been received for a site investigation contractor, with the contract expected to be placed in June 2017, or this month. It is proposed to hold a second public information day, followed by a public exhibition of the preferred scheme this year.
When these stages are successfully completed, provided the proposals are broadly accepted by the public and the stakeholders and the scheme is technically, environmentally and economically viable, the scheme will proceed to detailed design stage and formal confirmation by the Minister for Public Expenditure and Reform under the Arterial Drainage Acts 1945 and 1995 following which construction can commence.
My office continues to liaise with Cork County Council and local representatives on this scheme. As I said, I expect the site investigation contractor to be in place this month.
It is positive news that the site investigations will happen later this summer. However, when I raised the question late last year, the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs had agreed a solution on the way forward for the freshwater pearl mussel. It was proposed that there would be a second public information day and exhibition this year as well as detailed design. Is the detailed design slipping at this stage? Is it envisaged that the detailed design will commence this year and that we will be in a position to move towards tendering and construction for the overall scheme later this year or early next year? Can the Minister clarify that? Is it the case that there is still a cost benefit analysis to be conducted on this scheme, and is the risk still there that it could delay the scheme further?
With regard to the different questions the Deputy has put to me, due to the presence of the pearl mussel in some stretches of the river and its protected status, the scheme could not progress, which was the Deputy's point, until a proposal was submitted to the National Parks and Wildlife Service, NPWS. This was submitted in June of last year. The NPWS responded by stating that it had no comment or objection to the proposal. Following this, a desktop survey has been undertaken on the relocation of the mussels to inform the next steps. In terms of the timing of what will happen, as I have said to the Deputy and as he has acknowledged, the contract is expected to be in place this month. The site investigation will provide information on the channel to decide on the preferred options to progress the scheme. It is expected that this will take three months. I assume the second public information day will then take place after that.
Arís is arís eile, táim tar éis an cheist mar gheall ar na tuilte i mBaile Bhuirne agus i mBaile Mhic Íre a tharraingt os comhair na Dála. Tá géarghá leis an obair seo a bhrú chun cinn agus faoiseamh a thabhairt do mhuintir na háite. I dtreo deireadh 2011, chonaiceamar na tuairiscí faoi agus bhí dearadh le bheith déanta in 2014. An féidir an rud seo a bhrú ar aghaidh agus faoiseamh a thabhairt do mhuintir Bhaile Bhuirne ó na tuilte sa Sulán? The Lee CFRAM was a pilot for the whole country. Baile Bhuirne was the most advanced in that scheme at the time. Right around the country, we have seen so many other schemes advancing so far ahead of the people who are in the pilot. If we can quickly advance through the final design, can the Minister give a commitment that he will prioritise funding and have construction of this overall scheme advance as quickly as possible?
In the context of flooding, can the Minister confirm if the transfer of the Ministry responsible for flooding from the Minister of State, Deputy Canney, to Deputy Moran will happen?
There are two questions there. From a funding point of view, €74,000 has been expended on this project to date. The project budget will be finalised before exhibition, but we expect that the approximate cost of this will be around €3 million. I can confirm to Deputy Moynihan that this is included in the financial profile of the OPW up to 2020. Assuming that the cost is in line with that, the OPW will be in a position to go ahead with that work. I understand the need for this work in the community and I know of the damage that has been caused by flooding in the past.
With regard to Deputy Calleary's question, the changeover in officeholder will take place at midnight tomorrow night.
Capital Expenditure Programme
Thomas Pringle
Question:11. Deputy Thomas Pringle asked the Minister for Public Expenditure and Reform the reason local authorities were not consulted or asked to submit their views regarding his Department's review of the capital programme 2016-2021; and if he will make a statement on the matter. [26102/17]
This question relates to the review of the capital plan due to be published in September. Why were local authorities not consulted when the review was initiated and why was it left to them to make submissions as part of the public consultation?
Submissions in relation to the mid-term review and the additional funding available were sought by my Department in January and have now been received.
Submissions were not sought at that time by my Department directly from local authorities as we do not allocate funding directly to local authorities nor was it envisaged that the review would seek to determine the allocation of Exchequer resources to individual local authorities.
The allocation from central government to local authorities is determined by the relevant Government Department with responsibility for particular aspects of infrastructural spending, for example, housing and urban regeneration and transport investment. The assessment of the requirement for increased capital expenditure by local authorities is, therefore, first and foremost a matter for the relevant Government Department.
The short answer to this is that many of the infrastructural needs that local authorities will be raising are raised, I expect, by the Government Department that has responsibility for that area. All that being said, across the process, 12 different local authorities did make submissions. The Deputy will be pleased to note that one of them was Donegal County Council.
I know Donegal County Council made a submission because the CEO told us. However, that was as part of the public consultation rather than as a consultee on the actual review itself. It is remiss of the Department not to ask local authorities to formally make submissions. Much is made by Government about the fact that local authorities are not spending money and are not delivering on infrastructure projects, in particular on housing. The way this review is handled makes a lie of that fact, as local authorities do not have responsibility because they do not get the money. The money goes through the parent Department. That is part of the problem. As the Minister for Public Expenditure and Reform, perhaps the Minister should look at that to see how local authorities can be accommodated in that way and then try to make them more responsible for the money. The fact is they do not get the money and so are not asked to consult, as things stands.
I do not think the process we have put in place makes a lie of us. The way in which we handle expenditure is by making the funding available to Government Departments, as the Deputy has just said. Government Departments either allocate that funding to local authorities or instigate work on their behalf. The process we put in place was publicly advertised. If a local authority wanted to make a submission to us, it was entitled to, and 12 of them did. The needs that all local authorities will have is articulated to my Department by the Departments that have responsibility for the particular policy areas. It has to be done like that because otherwise we will end up in a situation where we will not be able to achieve co-ordination. In particular, we will not be able to put in place infrastructure projects that stretch across local authorities as opposed to being confined within them. All that being said, 12 different local authorities made submissions.
As 12 local authorities made submissions, what will be the status of the consideration given to those submissions? Will they be treated the same as the submission made by "Joe Public"? Obviously, the Department of Housing, Planning, Community and Local Government will decide on how money is allocated. What will be the consideration and status given to the submissions made?
The Department of Housing, Planning, Community and Local Government will be the deciding body on how it handles funding between the local authorities for which it is responsible for. That being said, I always find it helpful to see submissions like this, and I will read them. It allows me to understand whether there are any particular projects out there or any particular needs that could make a difference to a particular county or region that I should be aware of. I will look at these submissions, including the one from the Deputy's county. As I said on a number of occasions, I am well aware of the need for us to respond across the north west by increasing investment in infrastructure in the context of Brexit and the economic challenges it will pose to all the communities the Deputy represents.
Public Sector Pay
Richard Boyd Barrett
Question:12. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his plans for ending pay inequality across the public sector in the context of the public sector pay talks; and if he will make a statement on the matter. [26271/17]
David Cullinane
Question:13. Deputy David Cullinane asked the Minister for Public Expenditure and Reform his plans to address the issue of equal pay for equal work within the public sector and if he will make a statement on the matter. [26058/17]
This week, I went out and joined lesser-paid rank and file teachers from the INTO, the ASTI and the TUI who were protesting against the fact that there is a categorically of lesser-paid teachers - people who are employed as teachers post-2011 or 2012. They want to know whether as part of these pay talks, the Minister will commit to the principle of equality. By equality, they mean there is one single pay scale for all teachers.
I propose to take Questions Nos. 12 and 13 together.
The 10% reductions in starting pay for certain new entrants were introduced in January 2011 as part of the national recovery plan in order to reduce the public service pay bill by the then Government. The issue of addressing the difference in incremental salary scales between those public servants who entered public service employment since 2011 and those who entered before that date was addressed with the relevant union interests under the provisions of the Haddington Road agreement. From 1 November 2013, pre- and post-2011 pay scales were merged into a single consolidated scale applicable to each grade. Generally, the third point of the 1 November 2013 pay scale is equivalent to the first point of the pre-2011 scale. Guidelines relating to the merging of the scales are available on my Department's website.
Any further adjustment must also be considered under the framework of the Lansdowne Road agreement but must also be considered in the context of the total cost of the agreement, which is €844 million, and the total cost of the outstanding FEMPI restoration post-Lansdowne Road, which is €1.4 billion.
Under this agreement, we have made progress in addressing particular issues, such as the restoration of supervision and substitution payments and new entrant payments in the education sector and the restoration of rent allowances to new entrant fire-fighters and members of An Garda Síochána.
Additional information not given on the floor of the House
The matters raised by the Deputy are appropriate for deliberation by the management and staff representatives in the context of public service pay talks which are currently under way. It would accordingly be inappropriate to comment further on these matters at this time.
The protest the other day was organised by the rank and file. They are ordinary teachers, mostly young, who are in this lesser-paid category. The reduction in the level of inequality the Minister referred to in rather technical language still leaves a situation whereby under the Minister's proposals, teachers, ushers or other public sector workers who came in after 2011 will over the course of their lifetime earn €100,000 less compared to those who happened to come in before 2011 and were on the old scale. That is totally unacceptable for people doing the same job. In fact, they will be working harder with all the productivity proposals such as Croke Park hours but they are on this lesser scale and will earn that much less over their lifetimes. Just as we are now discovering with nurses, who are leaving the country and will not work in our public health service when we desperately need them, there is now a substitution crisis in education for the same reason. The teachers are starting to walk because they are not accepting this pay apartheid. Will the Minister commit to getting rid of it?
Let us talk about some figures amidst the Deputy's comments. From 1 January 2017, under the measures I agreed alongside the Minister for Education and Skills for INTO and TUI members, a new entrant will be paid a salary of €35,837. By 1 January 2018, when the second half of new entrant restoration has occurred, it will be considerably ahead of that. Amidst all the claims the Deputy is making regarding pay, and I see it every morning when I go into classrooms, let us bear in mind two things. The amount of funding I have to use to address the claims those teachers are making is the same pot of funding we have to use to pay for service improvements and investment in our schools and hospitals. Let us also acknowledge that with the plan we have in place, we are looking at a starting salary when all the different allowances and payments to teachers are included of €35,837, which I would contend is a salary that reflects the great value we as a country place on those who teach in our classrooms.
We hear all the usual chestnuts but the Minister does not answer the question, which is whether we are going to have equality. Are we going to have equality for people with the same professional training who will work the same number of years? In fact, they will work more years because of other attacks. Are we going to have a single pay scale for all of them or will we continue with the pay apartheid where over the course of somebody's lifetime, they earn €100,000 less? The Minister considers the starting pay good. He should try getting some accommodation on that starting pay and he will soon find out how good it is. We know there is a problem with nurses in terms of pay and conditions and now it is becoming evident in the teaching profession. Schools cannot get substitutes. Classes are going without teachers if somebody is ill because teachers do not want to work in this situation where they are treated as lesser paid - a sub-class of teacher - because of this pay apartheid and the Minister will not commit to the principle of equality no matter how many times he is asked.
It is because the principle of fairness I must respond to is different from the one the Deputy is concerned with. I must be able to make sure I am fair to people who need services and to people who need housing and make sure we have the money available to build housing. The Deputy comes in here and deals with each issue in isolation. I must be able to deal with each matter collectively because the resolution and progress of all these different issues comes out of the same amount of funding, which is the money the taxpayers contribute through their taxes and what we are able to borrow. I cannot commit to any further change in our pay policy because that is being negotiated at the moment between my Department and representatives of those who work in our public services in the Workplace Relations Commission. What we are engaged in there involves trying to find a way to see if we can, in an affordable way, unwind the FEMPI legislation - something the Deputy also called for. In fact, I am sure he would look for it to happen at a quicker pace than is possible at the moment. He would probably look for it to happen immediately, which goes back to the very point-----
I would.
I am glad the Deputy acknowledged it there. If he can come up with a recipe for me as to how we can find €1.4 billion immediately while meeting all the other needs he raises with me on a regular basis, I look forward to hearing what that formula is. If he could also assure me it would not destroy the economy that produces all the tax to deliver the services we are talking about, I would be interested in that as well.
Capital Expenditure Programme
Bernard Durkan
Question:14. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which he expects to be in a position to make adequate provision for vital infrastructural projects over the next four years with particular reference to housing, road and rail networks, communications, educational and health services and if he will make a statement on the matter. [26239/17]
This is the reverse side of the argument. Could the Minister tell us the degree to which he hopes to be in a position to provide the necessary funding for vital infrastructural projects listed in the question.
There is a plan in place to respond to many of the different needs referred to by Deputy Durkan. As set out in the Estimates 2017, it is projected that capital expenditure will increase by almost 75% between 2016 and 2021 but as I have acknowledged in responses to earlier questions, we know there is a need to find new ways to invest in capital infrastructure in our schools, hospitals and roads. The Government is currently engaged in a number of different options to see how we could achieve that.
Additional information not given on the floor of the House
The six-year capital plan published in 2015 set out Exchequer capital spend of €27 billion and, including the wider semi-State sector and PPPs, total State-backed capital investment of €42 billion. It is estimated that the plan will support more than 45,000 construction-related jobs. As the Deputy may be aware, there are a number of major projects included in the plan, such as, for example, the Luas cross city project, metro north, the Dunkettle interchange, the new children's hospital and schools building. This Government is strongly committed to increasing public funding for capital investment in Ireland over the next four years and beyond in order to meet key infrastructural requirements to sustain economic growth and social progress.
Alongside this increase in capital spending, it will also be important for the construction sector to build its capacity to undertake additional projects. For example, even at current levels of increased spending, the Society of Chartered Surveyors Ireland reports construction inflation of the order of 30% between 2011 and 2017.
The programme for a partnership Government committed to additional capital investment over the period of the capital plan to 2021 to be allocated in such areas as housing, road and rail networks, communications, educational and health services on the basis of the outcome of the ongoing review of the capital plan.
In this context, in the summer economic statement 2016, the Government committed to an additional €5.14 billion Exchequer capital investment over the period from 2017 to 2021. Following the decision to commit €2.2 billion of this amount in support of the Government's action plan on housing and homelessness and other public capital commitments made in Estimates 2017, there is approximately €2.6 billion in uncommitted additional capital funding over the period 2018 to 2021 which will be allocated following the completion of the review of the capital plan.
The analysis being carried out as part of the review include an infrastructure capacity and demand analysis which will help inform decisions by Government in due course on the required levels of investment for the provision of critical infrastructure across the different sectors of the economy. I expect that the approach I have set out to the review of the capital plan will help ensure that our national public infrastructure is maintained and enhanced over the remaining period of the capital plan to 2021 and beyond.
As set out in the Estimates 2017, it is projected that Exchequer capital expenditure will increase by almost 75% between 2016 and 2021. The Government is, therefore, ensuring that our continued strong economic performance is reflected in increased capital expenditure over the coming period.
What is the extent to which the Minister has been able to study the urgency of the requirements in some cases as opposed to others? For example, the housing situation is extremely urgent. In two or three years' time, it will not be as urgent because the market will have caught up and supply will have improved but the current situation is urgent. A similar situation pertains to road transport, hospitals and schools.
There is an urgency now which is due to the situation whereby it was not possible to arrange for expenditure of the necessary nature in the past six, seven or eight years, simply because there was no money. To what extent does the Minister see himself in a position to address those issues as they arise?
It is going to be challenging, because we have many different competing demands. We are working hard to see how we can identify new funding. We have already made progress on this by the identification of a further €2 billion between now and 2021 and 2022 and we are engaged in other pieces of work, for example, with the European Investment Bank, to see if there are additional ways of funding the infrastructure to which the Deputy refers.
Written Answers are published on the Oireachtas website.