Estimates for Public Services 2008.

Thursday, 11 December 2008

Dáil Eireann Debate
Vol. 670 No. 3

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Minister for Defence (Deputy Willie O’Dea): Information on Willie O'Dea  Zoom on Willie O'Dea  I move the following Supplementary Estimates:

[512]Final Dáil approval is being sought for a series of Supplementary Estimates proposing net additional voted expenditure of €765 million for 2008. These Estimates were originally introduced into the House on 25 October and have been fully debated in the relevant committees. The majority of this additional expenditure relates to the Department of Social and Family Affairs and the Department of Health and Children, and arises from the significant increase in the live register and a shortfall in UK receipts. Supplementary Estimates totalling €272 million have already been approved this year for the farm waste management scheme and the nursing home repayment scheme. As a result, total Supplementary Estimates for 2008 amount to some €1.037 billion, or just over 1% of total net voted expenditure outlined in the Revised Estimates volume for 2008.

Each of the Departments requesting funding has made offsetting savings. In fact, the majority of the Supplementary Estimates before the House today are technical in nature and do not involve additional moneys being transferred to Departments, but rather allow them to use these savings to balance pressures elsewhere in the Vote. Where additional moneys are required, they arise from exceptional circumstances which were unforeseen at the time the original expenditure allocations were voted on.

While the members of the individual committees may already be aware of the reasons behind the Supplementary Estimates in their respective areas, I will take the opportunity to outline the proposed Supplementary Estimates to the House in a little more detail.

The Department of Justice, Equality and Law Reform is seeking a net Supplementary Estimate of €12 million. This funding relates mainly to prison building and maintenance projects on the prisons Vote which have been underway for some time. A significant proportion of expenditure in 2008 relates to building projects in Wheatfield, Castlerea and Portlaoise, which when completed in 2009 will provide accommodation for up to 400 additional prisoners. The three technical Supplementary Estimates will allow for additional expenditure in some areas of the justice, Garda and courts Votes to be offset by savings and surplus receipts from appropriations-in-aid. It is also proposed that the balance of the surplus receipts in each of these three Votes, in addition to delivering sizeable savings to the Exchequer at year end, will be used to offset the €12 million transfer required to the prisons Vote.

The Department of Education and Science is seeking a Supplementary Estimate of €15.5 million for 2008 as a result of delays in obtaining certain European Social Fund receipts, which were due to be paid in 2008 but are now unlikely to be paid until 2009. It is also seeking approval for a technical Supplementary Estimate to transfer funds to three grant-in-aid subheads, in which relatively small excesses arise in 2008. The excesses relate mainly to the pay and pensions of teachers and special needs assistants. There are additional costs arising in the school transport area and specific pay award costs arising in the higher education area. While the amounts being transferred are small, a Supplementary Estimate is required to move the additional moneys into these subheads as they are all grants-in-aid.

The Supplementary Estimate for the Department of Community, Rural and Gaeltacht Affairs is technical in nature. An additional €5 million, generated from savings elsewhere in this Vote, will facilitate the disbursement of €3.5 million for capital projects and €1.5 million for current expenditure from the dormant accounts fund. The fund is used to pay for essential services to combat isolation, for example. It also resources programmes aimed at tackling substance misuse and preventing suicide. It funds preschool education and before-school and after-school programmes. It facilitates community-based transport services, accessibility, integrated mobility and independent living schemes. The fund is also used to provide finance for projects [513]aimed at lessening the social and economic disadvantage experienced by people with a disability.

The Department of Transport is seeking a technical Supplementary Estimate to allow unspent funds in a number of areas, primarily under the public transport subheads, to be reallocated in a number of other areas. The main area of additional expenditure is the national vehicle and driver licensing unit. It arises from the transfer of a number of functions from the Department of the Environment, Heritage and Local Government during the year.

The Department of Defence requires a Supplementary Estimate of €13 million for the Army pensions Vote. This amount is needed for two reasons. First, a shortfall of €6.75 million, arising from the 2008 cost of pension rate increases and the increased number of claimants, needs to be met. Second, €7.7 million is needed to pay for arrears of superannuation benefits, mainly higher retirement gratuities, which are payable to certain enlisted personnel who retire from the Defence Forces between 1 September 2005 and the end of 2008. These costs arise on foot of improvements in the pension terms of enlisted personnel recruited before April 2004. Agreement on these improvements was reached with the Permanent Defence Force Other Ranks Representative Association in November of this year, under the established negotiation machinery. The improvements will be implemented from a date not earlier than 1 September 2005. The gross shortfall of €14.45 million that arises in these areas will be partially offset by savings on various subheads and surplus appropriations-in-aid.

The Department of Social and Family Affairs is seeking a Supplementary Estimate of €380 million to cover the increasing pressure on a range of demand-led schemes. The increase in the number of people on the live register is leading to more payments having to be made under schemes such as jobseeker’s allowance, the free schemes and the supplementary welfare allowances, particularly the basic rent and mortgage supplement allowances. Since September of this year, the number of people on the live register has been increasing by approximately 5,000 per week. The rate of increase has accelerated in recent days. Such a scale and speed of increase is unprecedented. As a result of the rapid increase in the number of people on the live register, significant pressures have arisen at the local offices of social welfare services. There have been delays in processing applications for jobseeker’s benefit. This has led to an increase in the number of people claiming supplementary welfare allowance basic payments. The clearance of such arrears will have a significant impact on outturns under schemes such as jobseeker’s allowance and jobseeker’s benefit. The arrears component accounts for some of the difference between the number of people on the live register and the number of people receiving payment at any given time.

The Health Service Executive is seeking a Supplementary Estimate for a net amount of up to €345 million. My colleague, the Minister for Health and Children, has dealt with concerns about the predictability of some of the additional costs that have arisen, such as the consultants’ deal, the shortfall in UK receipts, the court case relating to pharmacy margins and the health repayment scheme. She has explained in detail the background to such costs and the subsequent need for a Supplementary Estimate in the health sector. It is not the practice to make provision for pay awards until the details of such awards have been agreed and signed off. To provide in advance for pay awards would undermine the Government’s negotiating position. Therefore, it was not possible to provide for the new contract for consultants — or, for timing reasons, the other requirements arising in the health area — when the 2008 budget was being compiled in December 2007 and the Revised Estimates Volume was being published in February 2008. The Minister for Health and Children has made it clear that she wishes to see demonstrable evidence that the reformed work practices to which the consultants have committed themselves [514]are being delivered on the ground before significant sums of public money are paid to consultants.

A technical Supplementary Estimate is required for the Office of the Minister for Children to take account of the transfer of youth affairs functions from the Department of Education and Science. This Supplementary Estimate will change the title of the Vote to that of the “Office of the Minister for Children and Youth Affairs”. It will also amend the ambit of the Vote to allow expenditures by means of grants-in-aid.

I would like to draw the attention of the House to the withdrawal of pigmeat from the market. The impact of this crisis on the agricultural and food processing sector is already being felt. The Government is determined to act in a timely fashion by addressing the immediate fallout from this crisis and minimising any long-term impact on the food industry and primary producers. Discussions between industry representatives and officials from the Department of Agriculture, Fisheries and Food have taken place to assess the situation. In this context, arrangements for an additional Supplementary Estimate for the Department of Agriculture, Fisheries and Food are being put in train. As the Tánaiste said this morning, such matters will be dealt with next week.

While Departments have used savings achieved elsewhere to offset expenditure overruns, where possible, the circumstances leading to the Supplementary Estimates before the House today could not have been foreseen when the 2008 expenditure allocations were being framed. They are necessary for the continued smooth running of public services. I commend these Supplementary Estimates to the House.

Deputy Richard Bruton: Information on Richard Bruton  Zoom on Richard Bruton  I suppose we should be grateful that the curtain is finally coming down on a year in which the Government’s chaotic management of the public finances has been on display. There has been an unprecedented deterioration in the condition of the public finances over the course of 2008. It is hard to believe that the Government, having been in surplus just two years ago, will have to borrow €12 billion this year. The Government is on course to double the national debt within less than four years. The golden rule that used to guide public borrowing policy — that one should borrow for capital purposes only — has been cast aside. By the end of this year, 30% of the Government’s borrowing will relate to day-to-day expenditure. That figure will double to 60% next year. That is no way to run a railway. We cannot raise money from international bankers only to use it for day-to-day spending. At this time, it is vital that we use money to invest in the infrastructure this country badly needs.

The Taoiseach, Deputy Cowen, fell asleep at the wheel when he was Minister for Finance. He failed to recognise that the underlying strength of the Irish economy was deteriorating seriously and became totally obsessed with the property bubble. He pretended that it was based on sound economic fundamentals. The core of our small open economy was exposed and gradually undermined. This country’s export market share has collapsed over five successive years. Ireland has become the most exposed country to the ravages of the international recession.

Over the past 12 months, the Government has continued to deny what is happening, in the face of mounting evidence to the contrary. Most of the proposals it has produced, late in the day, are not delivering efficiencies. For example, we were told on budget day that 41 State agencies were to be rationalised on foot of careful work that had been conducted. However, the Minister for Finance cannot point to a single euro that has been saved as a result of rationalisation. What sort of programme of rationalisation was that? The whole point of rationalising one’s bureaucracy is to save money to protect one’s front line services. What we have seen from the Government has been the opposite of that. Bureaucratic agencies have been [515]protected while meaningless rationalisations have taken place. The axe is falling at the front line.

When Deputy Cowen became Taoiseach, having been in charge of the public finances as Minister for Finance for four years, he suddenly announced that his priority was reform of the public service. He did not introduce any reforms during the four years for which he was responsible for the public service. When he became Taoiseach, he decided that this was his priority. What has happened as a result? We have been given promises of reviews. Following the 2008 budgetary review, the OECD was appointed to undertake another review. A further budgetary review was announced in October. There was then the report of the implementation group on the review by the OECD. At the end of that fifth review an bord snip was appointed to conduct yet another review. We will be six reviews from taking action by the time an bord snip reports to Government.

Ministers need to cotton on to the fact that voters elect them to make decisions on what are the priorities and where the cuts should fall. It is not people like Colm McCarthy and whoever else in his group, estimable as they may be, that we want to make decisions about this. We do not expect them to be aware of where the pressures on Departments are occurring, and what agencies are doing and whether they are coming up to performance standards. We expect Ministers to do that.

The sad reality is that Ministers blithely ignore the commitments they make. I went through the commitments made by Ministers in their so-called output statements only to discover that 40% of the commitments they made in respect of 2007 they did not deliver. If the priorities are not delivered, one would expect that Ministers would come in shame-faced to explain what went wrong. There is no such accountability by Ministers nor do the senior civil servants who are responsible for implementing these programmes come in shame-faced. On the contrary — they award themselves 10% bonuses for performance. How in the name of providence is it possible to come up with a scheme where when almost half of projects that were committed to be delivered by senior executives fail to be delivered, bonuses are handed out to them? It is ludicrous and the Government pretends it is powerless to deal with it. This is a system that is outside its control and done independently.

We need to move on and decide that senior public servants as well as Ministers are accountable for delivery. If there is failure on their watch they need to take responsibility. It would make them far more careful about the projects to which they commit, the cost estimates they give those projects and what they deliver on the ground. Under Fianna Fáil there is a culture in the public service where professional standards do not matter. It started with benchmarking when the Government allowed people to get pay increases without changing and delivering results. Then it went on to decentralisation where it thought it could move public servants around like pawns on a board without any regard to the professional work they were doing and the impact it was having on them. It then established the HSE which was a command and control centralised bureaucracy. The only justification for doing so might have been to rationalise the bureaucracy underneath and find savings to show that it could deliver at the front line. What did the Government do? It decided that people beneath in all those middle management positions would retain their posts and would not need to be moved.

All those policies suggested only one thing to the public service, which was that professional standards do not matter. The Government did not care whether public servants got money without delivering results. It did not care about the importance of their work when it came to the Government’s political skins and wanting to move public servants into marginal constituencies. That sort of thinking has undermined our capability to deliver quality public services from what has been an enormous increase in public spending up to this year. We are now [516]facing into a period when there will be no money. However, the high professional standards that should have been put in place for people to work to and the pride in their jobs that people could have had has been seriously damaged by foolhardy policies introduced by Fianna Fáil over a long period.

As we move into these much tougher times, Ministers need to get real. When they set a standard and define a strategy they need to say, “If this strategy fails, my neck is going to be on the line”. However, in strategy after strategy no such responsibility is taken. With the climate change strategy, which eight years on has delivered nothing on emissions, no Minister has taken responsibility. At best the health strategy has delivered 20% of the hospital beds and primary care improvements, and yet no Minister takes responsibility. After three years, fewer than half of the targets in the e-Government strategy have been delivered and no one takes responsibility.

Ministers cannot pretend that strategies will happen just by them attending glitzy launches and then disappearing into the undergrowth after which when everything goes wrong there is someone else to be blamed. They need to get down to the job of managing their Departments, holding the public servants under them accountable, having proper professional contracts engaged in and delivering the commitments into which they entered with the public. The sad reality is that commitments made to the public have never been regarded as anything more than a sop to get them through elections.

As we come to draw down the curtain on 2008 and see that the Government has spent €1 billion more and raised €8 billion less than it expected, we see a Department of Finance and a Government in serious turmoil. It is no longer able to control events as far as the public finances are concerned. When the budget was brought forward the one thing people expected was that a real strategy for the future would be articulated. They did not expect this would be an exercise in targeting the most vulnerable group — our grandparents in need of health care and our children looking for a decent schooling to represent the potential for the future — but that is what they got. They got no strategy. There was no sense that there was a team with a Minister and Taoiseach at the helm with a course charted to get us out of this. This was a panic measure introduced at the last minute and did not fulfil people’s expectations.

One might ask why people are looking at the Government in bewilderment. It is because the promise the Government made to them has not been delivered. That is the consequence. By building up expectations without delivering the Government rightly must suffer the whirlwind of unpopularity. Unfortunately some of the most vulnerable people will be hurt as the economy hits the buffers.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  I wish to share time with Deputy Ó Caoláin.

An Ceann Comhairle: Information on John O'Donoghue  Zoom on John O'Donoghue  Is that agreed? Agreed.

Deputy Joan Burton: Information on Joan Burton  Zoom on Joan Burton  WB Yeats wrote: “All changed, changed utterly”. The presentation of the Estimates by the Government is in many ways the final paragraph on a chapter in the Government’s history from the autumn which has been a disaster. It has been a disaster in political terms for the Government and its two parties, Fianna Fáil and the Green Party. However, more importantly it has been a disastrous period for many families and businesses throughout the country. The challenge for Government is not the difficulty of leading when times are good. The challenge of leadership is to lead when things are difficult and times are hard. On that test the Taoiseach and his Ministers fail.

[517]They failed the old-age pensioners, schoolchildren and people on hospital trolleys today. They failed the many public servants who at the moment have become the butt of ferocious attack by various commentators because, of course, when people are angry and bewildered they look around for someone to blame. Although in reality people value their teachers, nurses and doctors, the Government’s mismanagement is unleashing a torrent of abuse against public servants because of the way it has managed to create among the elite at the top echelons of the public service, as with elite in the Dáil among the top echelons of the Ministers, a climate of privilege and salary entitlement that is beyond the dreams of most ordinary families.

Many of the people at the top echelons of the Government and the Civil Service earn in excess of €200,000. It is understandable that people losing their employment should feel incredibly angry that the taxes they paid during the good years and the borrowing we are now undertaking as a country are being used to pay those kinds of extraordinary remuneration packages that in many instances are simply not deserved and were created because, apparently, they paralleled the private sector. I do not know many companies in the private sector queuing up to employ top civil servants or former Ministers at a rate of €200,000 plus. Why would they? They get far better people for far less than that. The Government has been unable to deal with the crisis of the unfair structures it has allowed through benchmarking and the fiasco of decentralisation. This has harmed the core of what was a very good public service ethos. The Government has allowed that to become disastrously lopsided in favour of the upper echelons of the public service, who were always central to the negotiations on benchmarking and decentralisation. One of the marks of this Estimate about that philosophy that is carried through, to which I really object, is that within the Health Estimate there is a provision of over €70 million for the new consultants’ deal.

The new consultants’ deal will offer consultants who opt for it a salary of €240,000 plus for approximately 37 or 38 hours per week. Many consultants in busy hospitals will work more than that and will not watch the clock. However it is known in every hospital in the country that this deal is particularly attractive to those who are soon to retire or who do not do much private work. They will take this deal, retire in a couple of years and get a greatly enhanced pension. The Tánaiste, Deputy Harney, has an ideology of privatising our health service and making a two-tier health service.

The €74 million is the heart of this Estimate. The Minister, Deputy Harney, says she will hang tough and not pay it until she is sure the consultants will work harder, but elective operations are being cancelled around the country. What do consultants whose procedures and operations have been cancelled do? They go to the medical common room and read the newspaper because they have nothing else to do. If all their elective procedures are transferred to the national treatment purchase fund in the private hospital down the road, what do they do? They take up another newspaper and read it. This is the insanity the Minister for Health and Children has delivered for the health service.

All around the country one meets people in the health service, doctors, nurses and administrators, who are depressed, defeated and seriously worried about the ethos of a public service which is vanishing. Some public servants who have given great service to this country at a reasonable price and at value for money are almost afraid to say they work in the public services. The ideology of the failed Progressive Democrats has done that. Although the party collapsed, it lives on in this crazy Estimate. The consultants will get this large lump of money while the young women who ought to be getting the vaccine for cancer will be denied it. If properly costed by the health service and delivered as in other countries, the vaccination programme would cost well under €10 million, whereas consultants will be paid to sit around and do nothing in the structures the Minister has set up.

[518]It is an extraordinary comment on Ireland. It is also one of the reasons that as a country during the Celtic tiger years we had a lot of soft power. People looked to us and admired us. Now our administration, like our economic figures, is full of uncertainty, disorganisation and chaos in certain areas, which is infecting the others. We are losing our soft power, the one thing we had as a small country. We have no friends left, and people can rightly say the Government has done this to us.

Deputy Caoimhghín Ó Caoláin: Information on Caoimhghín Ó Caoláin  Zoom on Caoimhghín Ó Caoláin  The Government is asking us to endorse Supplementary Estimates, but in considering them we cannot let the proposition pass without holding the Government to account for its economic mismanagement. We do not know what further cuts in vital public services are in prospect. In the Christmas period and the dark days of January before the resumption of the Dáil at the end of that month we will learn of further savage cuts in health, social services and education. This is the pattern. Sinn Féin will join with citizens in fighting those cuts and that is our pledge to the Fianna Fáil and Green Party coalition in the closing days of this Dáil session. We support the essential additional moneys for the Department of Social and Family Affairs with an additional 5,000 claimants presenting per week with spiralling unemployment, sadly, the order of the day.

Little attention has been given to Vote 40, the Supplementary Estimate for health of €350 million. Last month the British Department of Health told The Irish Times that negotiations have been underway with the Irish Government for the past 18 months. Privately I understand the British believe there was ample evidence that HSE bills had been “far higher than they should have been”. In July the British failed to pay a demand for €125 million of the bill and, in recent months, senior Department of Health and Children officials held talks on the payment issue with the British. The payments are based on the 1971 bilateral agreement, buttressed since by EU regulations. We must ask how this came about. We are not being given all the information. It points to overcharging by the HSE, which has led to the shortfall and this Supplementary Estimate. It is another example of the disastrous mismanagement of the health funding and services by the HSE and the Department of Health and Children.

I strongly object to the lumping together of these myriad Supplementary Estimates, some of which I support while others raise substantive concerns for me and others in this House. The process deserves much more attention and scrutiny than the miserable 30 minutes afforded this morning.

Votes put.

The Dáil divided: Tá, 72; Níl, 68.

Information on Dermot Ahern  Zoom on Dermot Ahern  Ahern, Dermot. Information on Michael Ahern  Zoom on Michael Ahern  Ahern, Michael.
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Information on Joe McHugh  Zoom on Joe McHugh  McHugh, Joe. Information on Liz McManus  Zoom on Liz McManus  McManus, Liz.
Information on Olivia Mitchell  Zoom on Olivia Mitchell  Mitchell, Olivia. Information on Arthur Morgan  Zoom on Arthur Morgan  Morgan, Arthur.
Information on Denis Naughten  Zoom on Denis Naughten  Naughten, Denis. Information on Dan Neville  Zoom on Dan Neville  Neville, Dan.
Information on Caoimhghín Ó Caoláin  Zoom on Caoimhghín Ó Caoláin  Ó Caoláin, Caoimhghín. Information on Kieran O'Donnell  Zoom on Kieran O'Donnell  O’Donnell, Kieran.
Information on Fergus O'Dowd  Zoom on Fergus O'Dowd  O’Dowd, Fergus. Information on Jim O'Keeffe  Zoom on Jim O'Keeffe  O’Keeffe, Jim.
Information on John O'Mahony  Zoom on John O'Mahony  O’Mahony, John. Information on Brian O'Shea  Zoom on Brian O'Shea  O’Shea, Brian.
Information on Jan O'Sullivan  Zoom on Jan O'Sullivan  O’Sullivan, Jan. Information on Willie Penrose  Zoom on Willie Penrose  Penrose, Willie.
Information on John Perry  Zoom on John Perry  Perry, John. Information on Ruairí Quinn  Zoom on Ruairí Quinn  Quinn, Ruairí.
Information on Pat Rabbitte  Zoom on Pat Rabbitte  Rabbitte, Pat. Information on Dr James Reilly  Zoom on Dr James Reilly  Reilly, James.
Information on Michael Ring  Zoom on Michael Ring  Ring, Michael. Information on Alan Shatter  Zoom on Alan Shatter  Shatter, Alan.
Information on Tom Sheahan  Zoom on Tom Sheahan  Sheahan, Tom. Information on P. J. Sheehan  Zoom on P. J. Sheehan  Sheehan, P.J.
Information on Sean Sherlock  Zoom on Sean Sherlock  Sherlock, Seán. Information on Róisín Shortall  Zoom on Róisín Shortall  Shortall, Róisín.
Information on Emmet Stagg  Zoom on Emmet Stagg  Stagg, Emmet. Information on David Stanton  Zoom on David Stanton  Stanton, David.
Information on Billy Timmins  Zoom on Billy Timmins  Timmins, Billy. Information on Joanna Tuffy  Zoom on Joanna Tuffy  Tuffy, Joanna.
Information on Mary Upton  Zoom on Mary Upton  Upton, Mary. Information on Jack Wall  Zoom on Jack Wall  Wall, Jack.

Tellers: Tá, Deputies Pat Carey and John Cregan; Níl, Deputies Paul Kehoe and Emmet Stagg.

Votes declared carried.

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