Committee Reports > List of Committees > Dáil > 1967 > Committee of Public Accounts > Report - Appropriation Accounts 1965 - 1966

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 9 Márta, 1967.

Thursday, 9th March, 1967.

The Committee sat at 11 a.m.

DEPUTY JONES in the chair.

Mr. E. F. Suttle (An tArd Reachtaire Cuntais agus Ciste) and Mr. C. J. Byrnes, P. S. MacGuill and M. Ó Murchadha (An Roinn Airgeadais) called and examined.

VOTE 41—TRANSPORT AND POWER.

Mr. O’Riordan called and examined.

484. Chairman.—Paragraph 59 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead D.2.—Córas Iompair Éireann

Redundancy Compensation

59. Section 15 of the Transport Act, 1958 authorises the payment of grants from voted moneys to Córas Iompair Éireann to meet the cost of compensation paid to employees, including those of the former Great Northern Railway Board, whose services were dispensed with or conditions worsened in the period from 16 July 1958 to 31 March 1964. Including £437,361 charged to this subhead, grants issued amounted to £2,764,959 at 31 March 1966. The grants paid were supported by auditors’ certificates of the amounts expended on compensation.”

485. Could you tell us how many cases are still in hand and how fast they are being cleared by CIE?—There are none held up by CIE as far as I know, but there were a number of appeals made to the arbitrator. There were delays at that stage, and in recent legislation we provided as an alternative that the appellant in the case of appeal could go to the Circuit Court. A number of these cases have gone to the Circuit Court but we have not yet got the details of the results.

486. Could you indicate the total cost?— The total number of people who received redundancy compensation amounted to 1,773. Of this compensation payable by the Exchequer there is roughly £2,700,000 paid to date. I think the total cumulative cost at the end will run between £7 million and £8 million, if I remember correctly. That would be over a very long period and the payments would go down year by year.

487. Over how many years do you think that will continue?—It would depend on the age of the youngest man who became redundant, because redundancy compensation is payable for life with a reduction at 65.

488. Is compensation payable to people after 1964?—Yes. The original compensation provisions still exist but if a man now becomes redundant in circumstances covered by the legislation, CIE must pay the compensation, not the Exchequer.

Deputy P. Hogan.—Since when did that rule become operative?—It is in the 1964 Act. The arrangements for payment by the Exchequer were terminated then.

489. Chairman.—Paragraphs 60 and 61 of the Report of the Comptroller and Auditor General read as follows:—

“Tourism

Subhead F.1.—Grant under section 2 of the Tourist Traffic Act, 1961 (Grant-in-Aid)

Subhead F.2.—Resort Development (Grant-in-Aid)

Subhead F.3.—Development of Holiday Accommodation (Grant-in-Aid)

60. Grants issued to Bord Fáilte Éireann to 31 March 1966 are shown in the following statement:—

Section 6 of the Tourist Traffic Act, 1966 removed the limit on grants under (1) above and increased the limits on grants under (2) to £3.25 million and (3) to £3 million.

61. Section 17 of the Tourist Traffic Act, 1952 enables the Minister for Transport and Power, with the concurrence of the Minister for Finance, to guarantee loans for various purposes in relation to the tourist industry. A statement presented to the Oireachtas in pursuance of section 24 (1) of the Act shows that, including a guarantee of £100,000 given in the year under review, the aggregate of guarantees was £2,331,713 at 31 March 1966. The aggregate amount of loans that may be guaranteed is limited to £5,000,000 and the Minister may not guarantee a loan after the expiration of twenty years from the passing of the Act. No advances have been made from the Central Fund for the fulfilment of guarantees. The Minister’s contingent liability for principal of guaranteed loans outstanding was £1,833,133 at 31 March 1966.”

490. Does Bord Fáilte have to indicate to you their grant-in-aid requirements for sanction by your Department at Estimate time?—Yes. In the Autumn they give us their estimates of what they would like to spend in the following year and we take the matter up with the Department of Finance to settle what they would be able to pay. If there is a reduction in Bord Fáilte’s earlier estimate, we adjust their budget. They show us their detailed budget, but it is not a matter for formal approval by the Minister; it is justification of the total sum they are looking for.

You get detailed proposals from them?— Yes. The amount is allocated under the headings of the previous year.

491. Deputy P. Hogan.—Is it any function of your Department to measure the board’s proposals against their performance? —Not directly. We have to confine ourselves to measuring the overall effect of the promotion and can compare the figures from year to year. However, with regard to individual points requiring technical consideration we are not qualified to do that.

492. Deputy P. Hogan.—I take it their accounts are audited by a commercial auditor?

Mr. Suttle.—No, I audit the accounts.

493. Chairman.—Paragraph 62 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead G.2—Constructional Works at Airports including Furnishing of Buildings

62. A payment made in the year under review under the contract for the erection of the principal buildings at Cork Airport brought their final cost as certified by the Department’s architects to £476,007. The first estimate of the cost of these buildings, in June 1959, was £195,000 but this was increased to £260,000 after a full examination of the requirements of operating companies and State services and to £287,500 in June 1960 following receipt of tenders. I have asked for an explanation of the wide difference between estimate and final cost.”

Mr. Suttle.—The decision to have an airport at Cork was taken in July, 1959, and the successful tender was approved in June, 1960. The airport opened in October, 1961, but works were not finally completed until June, 1962. Three reasons were given for the increased expenditure: (1) because of the urgency of the project the contract was placed before special sub-contracts could be planned in detail; (2) variations became necessary during the progress of the contract; (3) realistic advance estimation is only possible by thorough preplanning and, in this case, the time did not permit of adequate preplanning.

494. Deputy P. Hogan.—What was the urgency?

Mr. O’Riordan.—The question of providing an airport at Cork had been canvassed for many years. The Government had more or less agreed in principle and there was a great deal of local and political pressure to get it into operation for the 1961 tourist season and the Government took an overall decision to go ahead on the basis of a pretty broad estimate of cost given them by the Department of £1 million. While we had an excess in the actual buildings, the total cost of the airport did not exceed the original estimate very much, even though it was a very broad one.

495. Chairman.—Could you give any details of where the principal increases occurred?—It is very complicated. We have given a detailed reply to the Comptroller and Auditor General already. The main reasons were set out.

I can see that you have given very detailed information?—There are pages and pages of it.

I do not think it is necessary to go into the reasons.—Very well.

Deputy Crowley.—It was a very worthwhile and deserving project anyway.

Deputy P. Hogan.—We are not questioning that. We are questioning under-estimation. I am thinking of the Abbey Theatre and Templemore Barracks. These under-estimations crop up.

Deputy Kenny.—The Royal Hospital at Kilmainham is another case.

496. Deputy Crowley.—I think the witness said the overall estimate was right?—That is right. The overall estimate, which was really no better than a “guesstimate” at that stage, was £1 million and the actual cost was £1,174,000—a very slight increase.

Mr. Suttle.—My idea in raising the question was financial control by the Department of Finance. This was one sample of quite a number that we raised this year and last year. Sanction to go ahead with a project is given by the Department of Finance, but it is given on an estimate which becomes completely unrealistic when the final costs are ascertained.

497. Chairman.—Paragraph 63 of the Report of the Comptroller and Auditor General reads as follows:—

“63. In 1964 repairs costing £6,000 to windows at Cork Airport became necessary to prevent leaks which had become apparent since the airport opened in 1961. The explanation given to me by the Accounting Officer is that these leaks were not due to faulty design or defective workmanship but arose because the type of construction specified, although in accordance with accepted and proven standards, did not prove adequate in the exceptional weather conditions at the airport which is in an exposed position 600 feet above sea level.”

498. Have you anything to add to that, Mr. Suttle?

Mr. Suttle.—It is difficult to understand why neither design nor workmanship can be blamed for defects which showed up when the airport was opened. Geographical location and prevailing weather conditions must have been known when the buildings were being built.

Mr. O’Riordan.—That, in fact, is not the case. There were no satisfactory weather statistics available for the site of the airport and the observations since then show that, in fact, from the point of view of wind and rain, the site is very much worse than the site of University College, Cork, for which there were statistics. Our meteorological people have done a detailed analysis of this, showing the days, with gale forces, in each of the years 1962 to 1966 compared with Shannon and Dublin; over that period the totals show that at Cork there were 80 days with gale force winds as against 71 at Shannon and 41 at Dublin; there is a similar difference for the mean average wind speed and for the rainfall.

499. Deputy Crowley.—Even the humblest person living in that area, if you had inquired there from him, would have known that the airport location was subject to some gale force winds, and some fog and mist.

Mr. O’Riordan.—Yes, but we had no statistical evidence of what it amounted to that could guide the architect, or anyone else, and of course altitude of over 500 feet is quite a consideration there.

500. Deputy Crowley.—If altitude is given as an explanation, surely statistics were available to say it was 600 feet above sea level?—You could not pin down the meteorological people. They are people with a very scientific attitude to firm estimates. They want readings. On the other hand, the architect could not have had an idea what precisely the effects would be.

501. Deputy Kenny.—Were the buildings erected by private contractors? If the windows leaked it would not be a matter of altitude or statistics about weather. An ordinary contractor can make any building leak proof without any statistical evidence at all that the place is high, wet or foggy. The fact that the windows leaked to such an extent is faulty workmanship.

Mr. P. Hogan.—Was action taken against this contractor?

Mr. Suttle.—I am informed the Department were satisfied that the work was done in accordance with specification.

Mr. O’Riordan.—It was executed correctly to the design. Any fault would lie in the design. It was a normal design but it did not stand up to the conditions on the site. We have had to take abnormal steps to deal with it.

502. Chairman.—The architects were from the Board of Works?—No, our own architects.

503. Were there any other major defects or did any other defects develop in the buildings otherwise?—The control tower has something of the same problem.

Leaking?—Some leaking in the control tower arising from the same reasons. The control tower is even worse because it is elevated above the height of the other buildings.

Does it take place around the frames of the windows or through the windows themselves?—Through the frames.

Deputy P. J. Burke.—You would want to build it the same as a lighthouse?—Something like that. It turned out that special methods were necessary.

504. Deputy Crowley.—Not that we have any objection to the siting of the airport where it was sited, but I think there is a definite case of faulty workmanship. If you have a leaking window or frames, even in a normal house, surely the architects and the builder must be held responsible for this defect? It would be my opinion that the architects of the Department have fallen down on the job?—The design did not prove adequate, but how blameworthy in the circumstances the architect would be is another matter on which I am not qualified to pronounce. The fact is that the weather conditions, as subsequently observed, were worse than was expected at the time.

Mr. Suttle.—I understand the repairs included dismantling of the windows, repairing the concrete frames, adjusting and replacing them. They had to be taken out completely and the concrete frames repaired, in other words, the concrete surrounds.

Deputy Crowley.—Even on Mr. Suttle’s explanation, there is definite faulty workmanship?—Not the workmanship. It was executed correctly.

Deputy Crowley.—Faulty design is definitely in evidence.

505. Chairman.—Paragraphs 64 and 65 of the Report of the Comptroller and Auditor General read as follows:

“Subhead K.1.—Shannon Free Airport Development Company, Limited (Grant-in-Aid)

64. Grants to the company under section 8 (1) of the Shannon Free Airport Development Company Limited Act, 1959, including £430,000 charged to this subhead, amounted to £2,035,500 at 31 March 1966. The amount of these grants may not exceed £3,000,000.

The amount which the Minister for Finance may issue from the Central Fund to take up shares in the company is limited to £6,000,000. £719,000 issued during the year brought the total issues to £4,142,000 by 31 March 1966.

Subhead K.2.—Shannon Free Airport Development Company, Limited— Housing Subsidies and Grants

65. Section 5 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1963 empowers the Minister to pay grants to the company in respect of houses provided as part of a scheme for the provision of houses and community services for the purposes of the industrial estate at the airport. The charge to the subhead is comprised of £41,500 to subsidise the letting of houses at reduced rents and £31,150 for grants equivalent to those normally payable under the Housing Acts.

Section 4 of the Shannon Free Airport Development Company Limited (Amendment) Act, 1965 limits advances to the company from the Central Fund for housing and community services to £3,000,000. £131,000 advanced during the year brought the total advances to £2,009,000 by 31 March 1966.”

Mr. Suttle.—These paragraphs are for the information of the Committee regarding the Shannon Free Airport Development Company.

506. Chairman.—How is the development coming along?

Mr. O’Riordan.—Fairly well, I understand. As you saw recently, they have done some of the infrastructure of the new town. It has a greater chance of viability if it grows to a certain point where people have local interests.

Do you ever anticipate it will become self-supporting?—I am not very familiar with this yet, but I think the people responsible think that over a period it will become viable as a town.

Deputy Kenny.—What is the population now?—The short term aim is 6,000. It is 3,000 at the moment.

Chairman.—I was concerned about the company itself. Will it become viable in that sense?—In the long term they aim at being viable.

Will the development of the new industrial estates in Galway and Waterford have any effect on it?—That is not a field in which I have any expertise. The people at Shannon themselves are optimistic.

507. In regard to housing subsidies and the type of house being built there, do they compare in size and price with local authority houses?—I think they do. I have a table here which shows the cost for the four types of houses we have. The construction cost of the three-bedroomed house is £2,944; a better type of three-bedroomed house costs £3,110; a four-bedroomed house costs £3,248; and the better type of four-bedroomed house costs £3,922. These are construction costs and do not include the site costs.

508. I think I am correct in saying that these figures would be much in excess of what similar local authority houses would cost?—I do not know much about local authority costs. I imagine building costs at Shannon would tend to be somewhat dearer than in a town.

509. Are the rents charged comparable with those of local authority houses?— The rents are subsidised by a special subsidy which is designed to meet the difference between the amount one could expect people to pay in Shannon and the total economic rent after allowing for the equivalent of a Local Government grant. For instance, for the cheaper type of three-bedroomed house I mentioned, the rent charged is £97 10s. a year. That involves a subsidy of £105 a year. But for the most expensive type of four-bedroomed house the rent is £222 15s. and the subsidy element is only £47. So, the wind is tempered to the shorn lamb.

510. I take it the rents charged are based on a differential similar to that of local authorities?—No. At the moment there is a broad estimate of what the particular type of people looking for a particular type of house would be able to pay.

Deputy P. Hogan.—Nobody is asked to pay an economic rent?—No, but if the town becomes viable at some stage, they will.

Is that regarded as an effort to promote industrial development?—It is more the development of the town as such.

Is it ever anticipated they will at any stage pay an economic rent?—The Company have a scheme for getting the economic rent from some of the existing houses but over the whole period it will probably depend on the success of the whole undertaking. If the town becomes viable undoubtedly houses will be sought at economic rents.

Can the Company upgrade existing rents? —Yes. They have done so in the past and will probably do so in the future.

511. Deputy Kenny.—Will the occupants ever come to own the houses?—Not these houses. Nobody has done so so far but, apart from this, the Company encourage the building of private houses on sites which they let and help to develop. That is for people coming to live there at their own expense.

Deputy P. Hogan.—No purchase scheme houses?—There is provision for purchase but nobody has taken advantage of it so far. They would not, so long as the rents are subsidised.

Deputy P. J. Burke.—It is very early yet for people to begin buying out houses down there.

512. Chairman.—Paragraph 66 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead U.—Appropriations in Aid

66. With the assistance of a 50 per cent grant from the vote two tenders to serve passenger liners at Cobh were acquired by Cork Harbour Commissioners in 1961 and 1962 at a total cost of £451,765. Because of a substantial falling off in the number of liner calls it was found possible in 1965 to operate the service with one tender. One vessel was sold and the Commissioners refunded to the Department the amount, £26,658, by which the proceeds of the sale exceeded one-half of its original cost. It appears that at the time, April 1960, that the grant for a second tender was sanctioned the Commissioners had already intimated that liner traffic at Cobh was expected to decline and that one of the major operators was likely to withdraw altogether within a short period. I have, therefore, invited the observations of the Accounting Officer.”

513. Have you anything to add, Mr. Suttle?

Mr. Suttle.—The Accounting Officer has stated that the risk of an eventual reduction in liner traffic at Cobh was considered at the time the grant for each tender was approved. Estimates submitted by the Harbour Authority and the fact that they agreed to meet 50 per cent of the cost of the tenders from their own resources suggested that any significant decline in traffic would be gradual. Moreover, the Minister accepted the contention of the Authority, supported by Bord Fáilte, that an acceptable service could not be maintained without two tenders.

514. Could you give any indication as to how the traffic has varied since the resumption in 1947?

Mr. O’Riordan.—It has fallen. The number of liner calls fell to 134 in 1960; to 126 in 1961; to 131 in 1962; to 113 in 1963; to 119 in 1964 and to 79 in 1965. We have actually a later figure: in 1966 it went down to 69 and the estimate for 1967 is 66.

515. In view of the decline, would it not have been reasonable to have chartered a second tender for shorter periods?—The Harbour Commissioner took a very strong line at the time. They had objected all the time to running the service which they consider falls outside their proper functions. They had been agitating for Government support of it when they advanced this argument about the possible falling off in trade. It was in the context of seeking a 90 per cent grant rather than the 50 per cent grant which the Government offered. We argued very strongly that one good vessel and one cheaper vessel for stand-by would be adequate. They would not accept that and Bord Fáilte supported them and in fact the standard of tender service with the old vessels had been the subject of criticism over many years. What happened was that while some falling off in the long run was envisaged by everyone, these figures represent the extraordinary impact of the big jets on the Atlantic which were successful to a greater extent and much earlier than anyone had anticipated.

516. Deputy P. J. Burke.—Could the Harbour Commissioners not improve the revenue returns by using the tenders for sea runs during the tourist season?—They have done this to some extent but we understand they never found it very profitable with the question of overtime for crews and so on, arising.

I see. I had the advantage of a few runs a couple of years ago and I thought it was very nice. There were not many passengers on the boat. I suppose that was one of the things against it.

517. Chairman.—How is the service working with one tender?—It is poorer, but the liner companies concerned accept this poorer service as an alternative to doubling the charges. Really, the second vessel is only necessary on two types of occasion (1) when the existing service vessel is laid up for annual overhaul and (2) when there is a clash between liners calling at the same time. The Harbour Commissioners have to hire some other vessel to cover the overhaul period. On the other occasions, the liner companies have to decide which of them shall have priority.

You had to give in to all this local pressure since 1960? It seems the Harbour com missioners expected traffic to decline but there was this local pressure?—The Harbour Commissioners did not believe it would decline as rapidly as that. They were using this as an argument to get the grant increased.

Deputy P. Hogan.—It would seem that since the numbers fell to 69 in 1966, it would not be often that two liners would call together?—No. Clashes are not so frequent.

518. Chairman.—Paragraph 67 of the Report of the Comptroller and Auditor General reads as follows:

“67. Because of a decline in demand the Shannon Airport passenger hostels operated at a loss since 1961. The accumulated loss in the period of three years ended 31 January 1965, £7,267, was deducted from the profits, etc., of the Sales and Catering Service for the year ended 31 January 1965, and the net amount received, £96,704, was credited to this subhead.”

519. Have you anything to add, Mr. Suttle?

Mr. Suttle.—I have drawn attention to this transaction because it is not shown separately in the Appropriation account. Only one hostel is now retained as passenger accommodation. The decline in demand by passengers followed the introduction of jet aircraft and the growth of hotel accommodation in the Shannon region.

520. Could these hostels be let to your personnel, other than passengers?

Mr. O’Riordan.—There is only one reserved for passengers. The others are let to staff and people working in the industrial estate. Even so, there has been a deficit but we have decided to increase charges from 1st May next in different categories and we hope to wipe out the deficit.

521. Is there any advantage in retaining one hostel?—We think so. This is experimental. The hotel there is a luxury type hotel and quite expensive and we feel it desirable to hold at least one passenger hostel for the time being. But, of course, we review the position from year to year.

522. Chairman.—Paragraph 68 of the Report of the Comptroller and Auditor General reads as follows:—

“Suspense Account

68. I have asked to be supplied with details of a balance of £42,391 standing to the credit of General Suspense Account at 31 March 1966.”

523. Have you anything to add, Mr. Suttle?

Mr. Suttle.—I am informed that the sum of £42,391 included £39,200 surplus cash surrendered by sub-accountants which has since been cleared and that the balance has now been identified apart from sums amounting to £158 which it is proposed to appropriate in aid of the Vote. Failure to examine the account for some time was attributed to staffing difficulties.

You have some details to come?—Yes, some still to be cleared.

524. Deputy P. Hogan.—On subhead D.2 —Coras Iompair Éireann Compensation— what is the reason for the fall in the figure as compared with the previous year?—The figure will fall by a certain amount each year as people die.

It has fallen from £724,000 in 1964-65 to £437,000 in 1965-66. That is a considerable reduction?—When people become redundant a number of them may take a quarter of the redundancy compensation in the form of a lump sum, so that in the initial years the total figure tends to be higher.

The witness withdrew.

VOTE 7—OFFICE OF THE REVENUE COMMISSIONERS.

Mr. S. Réamonn called and examined.

525. Chairman.—Paragraph 9 of the Report of the Comptroller and Auditor General reads as follows:—

“Revenue Account

9. A test examination of the Revenue Account has been carried out with generally satisfactory results.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—An examination was carried out to test the effectiveness of the regulations made in relation to the assessment and collection of revenue under these various heads.

526. Chairman.—Paragraph 10 of the Report of the Comptroller and Auditor General reads as follows:—

“10. The net yield of revenue for the years 1965-66 and 1964-65, under its main heads, is shown in the following statement:—

£194,142,000 was paid into the Exchequer during the year leaving a balance of £79,935 as compared with £64,890 at the end of the previous financial year.”

527. In regard to item 2, Excise, I notice there was a very large increase of £6 million. Under what head was this realised?

Mr. Réamonn.—There is an increase there over the previous year of £6,236,527, and the increase is due mainly to increased yields from all oils which accounted for £3.7 million; beer, £1.5 million; spirits, £.8 million; and tyres, £72,000. The rates of excise duty on oils, beer and spirits were increased in the Budget. There was an upward trend in receipts under all excise heads of duty in 1965-66. We must also recall that the customs and excise duties on beer, spirits, oils and tobacco were further increased as from 10th March, 1966, by the Budget of the 9th March, 1966. You will recall that there was a Budget on the 11th May, 1965, and there was another one then on the 9th March, 1966, which was before the financial year 1965-66 had ended.

528. Deputy P. Hogan.—How much was received from tax on fuel for motor vehicles?—From the excise point of view, looking at the year 1965-66, the yield from mineral hydrocarbon light oils, which in common parlance is petrol, was £19.5 million. To that we must add the receipts in the same connection under the head of customs which in the year 1965-66 was £1 million.

529. Receipts from motor taxes do not appear in that column at all.

Mr. Suttle.—No. They go from the Department of Local Government to the Exchequer and from the Exchequer to the Road Fund.

Mr. Réamonn.—We have no function at all in that respect.

530. Chairman.—Paragraph 11 of the Report of the Comptroller and Auditor General reads as follows:

“11. I have been furnished with the following analysis of amounts of Income Tax, Sur-tax and Corporation Profits Tax outstanding:—

Comparative totals for the previous year are—Income Tax, £4,963,270; Sur-tax, £1,082,311; Corporation Profits Tax, £1,013,000.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—This is the usual statement of outstanding assessments for income tax.

531. Chairman.—Are we falling into arrears in the collection? Is that the explanation?—No. I should like to give you a full reply, if I may, to that query. If we go back to 1st June, 1961, the total income tax arrears was £9.4 million for the years up to and including 1959-60. If we advance then to 1st June, 1964, the corresponding total for the years up to and including 1962-63 was £4.5 million, which was, if you like, a dramatic reduction. In other words, on 1st June, 1964, the arrears figure stood at a little less than one half of what it had been on 1st June, 1961, and the explanation was, of course, that we had had an intensive drive to clear off old Schedule E arrears in preparation for the introduction of Pay As You Earn. We also strove very hard to reduce arrears under Schedule D in respect of trading profits. You will see in Paragraph 11 the total arrear for income tax is £6.3 million and in the table for the previous year the corresponding figure was £5.0 million, and that seems to show an increase. It shows an increase of £1.3 million. Now, looking at the figure you have in front of you, the £6,254,202, it must be borne in mind that approximately 53 per cent of that related to the previous year, 1964-65, because the chief component of an arrear at a given point of time, as you will readily understand, relates to the immediately preceding year and this component of £6,254,202—that is to say £3,339,217—represents nine per cent of the total income tax charge for 1964-65, excluding tax collected under PAYE. The corresponding total amount of income tax outstanding at 1st June, 1965, was, as I said already, £5.0 million and of this £2.4 million, or approximately 50 per cent, related to the immediately preceding year which, in this case, was 1963-64, and this represents 7.4 per cent of the charge for that year. Now, coming down to the net question—the reasons for the higher arrear figure—first of all, the introduction of the new system, if you like, the revolutionary new system of “one taxpayer one charge” which was brought into operation in 1963-64, but for only ten pilot tax districts, and which was extended to the whole country in 1964-65, entailed taking precautions to ensure it would function properly; in other words, we were not able to act quite as speedily in the issuing of notices of assessment, and so forth, as we had been accustomed to do in the past and the slowing down of the issuing of notices of assessment meant that there was a slowing down in appeals so that, in consequence, during the relevant period a greater amount of tax has been under appeal or inquiry. I should add the consideration, however, which is important, that the income tax charged for the year 1964-65 was about 15 per cent higher than for 1963-64 so, when you have a higher charge, you would expect a higher arrear, apart from the fact that, as I have tried to explain, the slowing down of the issuing of notices of assessment on account of the great care we were taking to ensure that the new system of “one taxpayer one charge” would function smoothly was there. All these factors have combined to produce the higher figure of arrear you have in front of you now. I should add that, if you look at the first column there where you see the figure of £5,013,727, I cannot evaluate how much of that will be ultimately collected because it includes a number of very substantial cases which are under appeal before the courts—very substantial cases. Now, if we lose these cases, we will collect nothing at all whereas, if we are successful, we will collect the entire amount.

532. Chairman.—Paragraph 12 of the Comptroller and Auditor General’s report reads as follows:

“Extra-statutory Repayments of Customs and other Duties

12. Extra-statutory repayments of Customs duties, £17,002, Excise duties, £13,307 and Stamp duties, £63, were made during the year.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—No.

533. Chairman.—For my own information, what are extra-statutory repayments?— Take customs, it will illustrate what you have in mind. We will look at the year 1965-66. The amount was £17,002 2s. 7d. Now the greater part of that was extra-statutory repayment under the heading “Diplomatic Privilege”. We had only one other case, which accounted for £43 6s. 8d.; it was a type of case which we had occurring and recurring over a number of years. It goes back to the Anglo-Irish Trade Agreement of 1938, Article 16, which provided for the imposition of a duty of 3/-per ton on imports of coal and coke of non-British origin. In the year 1965-66 a company was obliged to arrange for the importation from West Germany of a quantity of 288 tons of foundry coke. The reason was that at that particular time the British National Coal Board were unable to supply this coke. Now the duty of 3/- per ton had to be paid and we repaid extrastatutorily with the authority of the Minister for Finance.

534. Paragraph 13 of the Report of the Comptroller and Auditor General reads as follows:

“Remissions and Amounts Irrecoverable

13. I have been furnished with schedules of the cases involving a loss of £50 or upwards in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable during the year ended 31 March, 1966.

The total amount of the items included in the schedules, £31,735, is made up as follows:

The distribution according to the grounds of remission or write-off is:

I have made a test examination of the items included in the schedules with satisfactory results.”

Mr. Suttle.—Again, this paragraph is for the information of the Committee.

535. Chairman.—Paragraph 14 of the Report of the Comptroller and Auditor General reads as follows:

“Interest on unpaid Taxes

14. Section 8 of the Finance (No. 2) Act, 1959 and section 55 of the Finance Act, 1963, provide for the payment of interest on outstanding amounts of income tax under P.A.Y.E. and Turnover Tax. It was noted in the course of audit that interest demanded had been waived in a number of cases and I have inquired regarding the position.”

536. Have you anything to add, Mr. Suttle?

Mr. Suttle.—I have been informed that the collection of interest of £4,000 on PAYE and £5,400 on turnover tax due was not proceeded with in cases in which good explanation of late payment was given and the payment history was satisfactory. It was considered also that enforcement action regarding relatively small amounts was uneconomic.

Mr. Réamonn.—That is correct. I should say, first, that the amounts of interest apparently waived were comparatively small. When I say “apparently” I use the word advisedly, as I shall show. If you look at the Pay As You Earn regulations, called Income Tax (Employment) Regulations, 1960, paragraph 31, you will find provision as to the time within which the employer is obliged to pay over to the Revenue Commissioners the tax which he has deducted from the remuneration of his employees. Section 8 of the Finance (No. 2) Act, 1959, provides that, where the employer has not paid the tax over to us within the prescribed time, simple interest is to be exacted. This simple interest is calculated at the rate of one per cent for each month or part of a month beyond the expiration of the specified period. You have a similar provision as regards turnover tax. If you look at the Turnover Tax Regulations, 1963, paragraph 6, you will see the time allowed for remitting turnover tax. If you go on to look at section 55 of the Finance Act, 1963, you will find provision once again that where the tax has not been paid simple interest is exacted and it is at the same rate as in the case of income tax under Pay As You Earn.

I said at the beginning that the interest was apparently waived, but in fact it was not formally waived at all. The Comptroller and Auditor General has just explained that the amounts in question were in respect of cases where accountable persons replied to our demands for interest and gave what we regarded as acceptable explanations of late payment. In such cases, if the payment history is good, we do not follow up the outstanding interest. The interest, I should stress, is not waived. It is simply allowed to remain in abeyance. We can always pursue it again if the circumstances so warrant. We feel enforcement action in respect of the bulk of these amounts would not be justified on the grounds of economy, because the handling of these very small sums by the Arrears Branch would seriously impede the work of that Branch in the collection of substantial amounts of tax arrears. But in bad cases we never lose sight of the interest. I should like to conclude by emphasing something I believe I have said before. The tremendous success of Pay As You Earn is due very largely to the cooperation of the Association of Chambers of Commerce, the Federation of Irish Industries and other bodies of employers. It appears to us that this goodwill would be endangered if we were to rigidly enforce payment of interest in all cases, especially where the payment record is good and the delay in remitting the tax unavoidable.

537. Deputy Briscoe.—The Revenue Commissioners have had the power to lodge anyone in jail who had not paid his income tax without bringing him to court. It has recently been repealed. Before it was repealed was anyone lodged in prison, say, in the last two years?—I think not. This was a very old provision. It was almost 100 years old, I think. We in recent years—and when I say “in recent years” I mean going back 20 or 30 years—would only consider using this provision in the case of a person who would normally be a wealthy person, who would run up a bill of tax which he refused to pay and we knew, or had reason to suspect, that this person was about to leave the country. We would only consider using that power in such cases. Going back once again 20 or 30 years—I am speaking from memory—there were perhaps four or five cases in which it was used. The power of arrest is normally a threat, as it were. As a rule, when a person sees that arrest is imminent, he just pays. There may have been a case, but, if so, it is a long time ago—at least fifteen years—where a person was actually lodged in prison. As a rule, the threat of arrest is sufficient to secure payment. I should say there is always a risk —it was referred to in the debate in Dáil Éireann on Tuesday, the 7th March, 1967— and there is some necessity for a provision which would not offend against the Constitution but would nevertheless prevent people who owed a considerable amount of tax, which they refused to pay, from leaving the country, perhaps for good. We all know in the United States that is not possible. There is an Office of the Internal Revenue on the wharf and you have to get clearance from them before you leave the country. A few years ago this very question, I recall, was discussed before the Public Accounts Committee in Great Britain. One of the members of the Committee suggested that they should have a similar system in Great Britain to that which operates in the United States. In other words, they should screen people on the wharf or quayside and refuse to allow them to leave the country unless they produce a tax clearance. I think the Chairman of the Board of Inland Revenue, Sir Alexander Johnston, thought there would be a difficulty from many points of view of instituting a similar system in Great Britain. There is always that problem of people who owe a big bill of tax leaving the country, perhaps for good. It was only in such cases that we considered using that power. It is a good many years now. We only invoked that power in very few cases. At the moment, I cannot recall a case in which a man was actually lodged in prison.

538. Chairman.—Paragraph 15 of the Report of the Comptroller and Auditor General reads as follows:

“Schedule E.—Balancing Statements

15. Reference was made in paragraph 18 of my report on the 1963-4 accounts to the balancing of Schedule E income tax collectible by the Central Collection Branch. The position in December 1965 was that full balancing had been completed up to 1961-62 but the years 1962-63, 1963-64 and 1964-65 had presented special complications which would take some time to clear up and it was expected that there would be no difficulty in balancing 1965-66. I recently requested up-to-date information.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—The latest information I have on this question is that in September last the difficulties relating to the years referred to in the paragraph had not then been resolved.

539. Chairman.—Has there been any progress, Mr. Réamonn?

Mr. Réamonn.—I shall put this as briefly as I can. The Comptroller and Auditor General has pointed out that balancing statements for the years 1960-61 and 1961-62 have been completed. Work has now been concentrated on the year 1963-64 which was a pretty difficult year and we expect to complete the machine balance or balance of the charge for that year in the next five or six months but when we will complete full balancing for that year I cannot say at the moment. The balancing for the years 1962-63 and 1964-65 depends so far as the ledger balances are concerned on the completion of the balance for 1963-64. As regards 1963-64 the only hope we have is to complete the balance of the charge for that year in the next five or six months and do the best we can for the ledger balance. Then the position regarding the ledger balancing of the three inter-related years 1962-63, 1963-64 and 1964-65 will become crystallised. As regards the years from 1965 onwards we should not have so much difficulty because we now insist on remittances being accompanied by machined documents so that we are able to attribute tax remitted to the proper year of account.

I have something of some importance, I think, to say here. Normally we would begin full balancing for 1965-66 about June of the present year, 1967, but we are deferring it until September, 1967, because of a changeover to a larger computer installation which is scheduled to begin in July, 1967. So we propose accordingly to defer balancing of 1965-66 until September, 1967 when operations on magnetic tape on a new computer will greatly facilitate the balancing work. When we have a larger and more elaborate computer in use under the new system ledger or machine accounts will be in balance on a day-to-day basis so that the problem we have been considering under this head for a number of years past will then completely disappear.

540. Deputy Crowley.—What make of computer are you getting?—It is a Honeywell. The computer we have been using is a 1301 ICT computer and it gave us excellent service and we have no complaint. We got great help and co-operation at all times from the company concerned. The work of the existing computer can be put briefly by saying that we achieved collection and control in general accounting and statistics work for income tax and sur-tax including Pay As You Earn, corporation profits tax, turnover and wholesale tax and we were also able to do work for other Departments and also able to do arithmetical calculations for the taxes to which I have referred except income tax under PAYE. We have received the authority of the Minister for Finance for the rental from Honeywell Controls Limited of a large magnetic tape computer installation and we will start with a single shift and we may be able to do extra work for outside Departments. When this new electronic computer has been installed we would be able to provide for the work on salaries and wages of all Revenue staff but what I really want to stress is that with the new computer we will give special consideration to the possibility of mechanising the bulk work relating to PAYE. By that I mean the calculation of tax-free allowances and the preparation of tax-free allowance certificates, all calculations and preparations of annual statements of liability within PAYE. We believe that the number of liable PAYE employees will exceed 600,000 in the foreseeable future.

541. How many people will that save in your Department and how much is it going to cost to hire this machine?—I should say first of all that there is no question of redundancy. On the contrary, looking at the year under review 1965-66, we had an average of 100 vacancies. On the 27th February last I went to the trouble of counting the vacancies on that day and it came to 104. If we had not got this new computer we would probably have to try to get 200 extra staff and try to provide accommodation and so on which would be impossible or extremely difficult. Referring to what is described as the Honeywell 1200—the average overall cost per annum must take account not only of the rental but also of the training of staff and other peripheral costs and various things—we calculate that the average overall cost per year of this installation which we expect to have this summer will be £204,000. The gross savings per year will be £409,000 so that the average net gain to the Exchequer per annum, we estimate, will be £205,000.

542. Deputy Briscoe.—How much would the machine cost itself if you could buy it outright?—I do not think you can buy it outright. On very mature consideration we have decided that it is a better policy to rent because you can then get the advantage of improvements and so on. The policy is to rent rather than purchase outright. I should like to add that although I have given the figure for the net saving per year to the Exchequer it does not give the complete picture because without electronic apparatus we could not have undertaken the fresh work thrown on our shoulders in recent years. It simply would not have been possible. There are other considerations also. For example, by releasing inspectors of taxes from repetitive or arithmetical work we left them free to devote their time to work more appropriate to their grade.

Deputy Kenny.—Is it under the Stationery Office that this business of buying or renting is done?

Chairman.—There will be a question arising on that later.

543. Deputy Crowley.—You say there will be a saving of £409,000?—That is our estimate.

Is it on staff or what?—It is a bit complicated. I was interested in this question personally and I was interested in it in relation to the 1301 ICT computer and I asked my people to prepare—I do not know what I would call it, perhaps a profit and loss account. They prepared it and I have a copy of it here. It is a little bit complicated but if the members of the Committee would care to have a copy of the similar account which we prepared in relation to the Honeywell installation I shall be happy to circulate copies.

Chairman.—Would you send us a copy of both documents, the Honeywell and the other?—I shall be delighted to send them to you, Mr. Chairman, and through you to the members of the Committee.*

544. Deputy Crowley.—Did you consider any other computers?—Yes. I can say that Honeywell was selected after very extensive and detailed investigations into the range of computers available from the leading computer manufacturers. I should like to stress again that we had no quarrel whatever with the 1301 ICT; it was merely that the Honeywell 1200 was more suited to the particular new field we were entering upon.

Is this computer being used by revenue commissioners in any other country?—I think it is being used in the United States, but as regards our neighbouring country I do not want to be too specific. There are certain difficulties.

545. Chairman.—Paragraph 16 of the Report of the Comptroller and Auditor General reads as follows:—

“Customs Duty Deposits

16. It was observed in the course of audit that some deposits on account of customs duty had been held in a suspense account for several years. As a result of my inquiry these deposits have been cleared and the procedures in operation regarding deposits of duties have been amended to provide a tightening of control.”

Have you anything to add, Mr. Suttle?—

Mr. Suttle.—I am informed that specific instructions have now been issued for the regular review of all deposits.

Mr. Réamonn.—Here we must cry “peccavimus” because we were at fault. A customs deposit is a sum of money held in a suspense account. It may be so held pending the determination of the appropriate amount payable or held in respect of the exportation of goods imported temporarily. I could cite a number of other reasons but these customs deposits are lodged with the collector of customs and excise for the area in which the importation takes place. It would be wrong to suppose that the moneys on deposit are lying idle. On the contrary, they are normally placed to the credit of the General Account of the Revenue Commissioners in the Bank of Ireland and used for the benefit of the Exchequer throughout the financial year. The turnover, if I might use the expression, in deposits is very substantial. In the year 1965-66 it came to £17.6 million. However, that might give an exaggerated picture, because about £.25 million was deposited each week in respect of oils. The majority of deposit cases are resolved normally by the collectors. We had a reasonably elaborate system but it was not found adequate and in early 1966 the Comptroller and Auditor General raised queries in respect of a small number of outstanding deposits; there were eight deposits. Following these queries raised by the Comptroller and Auditor General we have introduced a new and improved system. The principal improvement is that one of the Customs and Excise divisions at head office has been given a special co-ordinating function in this regard. In future, each collector will be required to furnish annually to this head office division, not later than mid-May, a list of deposits which are more than two years old on the previous 31st March. The co-ordinating division will then take up with the division directly concerned the question of clearing these deposits and a report of the position will be made to the Assistant Secretaries. Under the new system also a special review will be made annually by the Accountant-General of Revenue of all deposits which are more than two years old. I should add that following the introduction of this new system all deposits more than two years old on 31st March, 1966, have been disposed of.

546. Deputy Briscoe.—There is one important question I should like to ask. Recently a case was brought to my attention where a new company starting off obtained a duty-free licence to import a prototype of a particular article. It came through from Belfast but at the border the Customs official for the Republic refused to accept the duty-free licence, insisting that a payment of £95 duty be paid. These people were later able to get back this amount, but it is the long delay in getting it back which one has to complain about.

Chairman.—I do not think that is a question for this Committee. That would be a question to be asked in the House.

Deputy Briscoe.—I am saying merely that it takes so long to get back the refund of the duty. It does not appear that the machinery works very well when people have to wait such a long time?—If the Deputy would care either directly or through you, Mr. Chairman, to communicate with me and to give me some particulars of the case, I would be very happy to deal with it.

547. Chairman.—Before going on to the Account itself may I say that a question was raised on the last day when the Accounting Officer for the Stationery Office was here before the Committee, in regard to the hiring of machines for your Office. Are you aware of this?—It has been brought to my attention by my colleagues.

The suggestion here the last day was that there was a lack of liaison between your office, the Stationery Office and the Department of Finance in regard to the clearance of the hiring charges?—First, as I understand it—I am not familiar with this— these procedures are governed by regulations sanctioned by the Minister for Finance and I would not be expected to comment on these regulations. However, there were specific cases mentioned when the Vote for the Stationery Office was being investigated before this Committee. Where it is a case of the outright purchase of machinery or equipment I understand there is never any delay, but in these specific cases there were delays in relation to what we call address card cutting machines. There were protracted negotiations because they became involved in the whole question of installing the original electronic computer. We were at fault in a delay in seeking the sanction of the Minister for Finance. We have no excuse for that, I think, but generally I am told that the suppliers of the equipment in such cases fully understand that there may sometimes be circumstances involving protracted negotiations when equipment is being hired and they did not expect settlement as promptly as would apply in simple contracts for outright purchase. For example, the standard charge for hiring may be related to single shift working and then for our part it might be arranged for working in excess of a single shift, which would mean that there would then be an excess charge for hours worked in excess of the single shift to compensate for the extra wear and tear on the machine. There is the factor of the variations in the cost per hour of maintenance men’s wages. There is the additional factor then, which arises sometimes, of variations in the prices of spare parts and, when a hiring period is completed, items such as these frequently come up for examination and discussion and the vouching of accounts must necessarily be deferred until agreement is reached between the suppliers and the users of the equipment. I mention these difficulties, which are real difficulties, to inform the Committee since the matter has been brought to my attention by you, Mr. Chairman, and I shall be very happy now to discuss with my colleagues whether, in spite of these real difficulties which arise, some improvement might not be made in the system.

548. Chairman.—The next point that arises is that the nett position is that, in the hireage of these machines, a charge of £468 was incurred, hireage of machines which generally cost £91 10s. to buy. The Accounting Officer for the Stationery Office pointed out in his evidence to the Committee that he was not going to pay this unless the Department of Finance gave it their blessing. The question then arose as to whether the Revenue Commissioners had authority from the Department of Finance to get these machines in the first instance.

549. Deputy P. Hogan.—It would appear that the hireage was negotiated by the Revenue Commissioners in 1961 and, in 1963, the Stationery Office refused to pay on the basis that sanction had not been obtained from the Department of Finance. It was not until December, 1965, that application was made by the Revenue Commissioners to Finance and sanction was given on 4th January, 1966. There was a large gap in time between November, 1961, and December, 1965, before the Revenue Commissioners looked for sanction from Finance and, in the interval, the Stationery Office had kicked up and would not pay out of the Vote.

550. Chairman.—I suggest it might be more satisfactory at this stage for you, perhaps, to consider this and send us a note, or you might care to discuss it at a later stage?—I shall be happy to write you a note upon it because it is only very recently it has come to my attention.*

551. There is a question I would like to ask with regard to turnover tax. In the course of the Committee’s examination of the previous year’s account you informed us that steps were being taken to compare the turnover tax with the figures shown in the annual report and, at that stage, you said the process had not been extended to all districts. What have been the developments in the meantime?—First of all, the information available in tax districts has been used, and continues to be used, to ensure that all persons, firms and companies who engage in taxable activities in circumstances in which they are accountable for turnover tax are, in fact, registered. A comparison is made between the summaries of the traders’ turnover tax returns and the annual accounts submitted for income tax purposes and any necessary action is taken in the event of a discrepancy. Now, in addition to random audits and spot checks in different parts of the country, a programme of systematic audits of a number of tax districts is being carried out each year by the staff of the Audit Branch. In these checks at least one town in each district was selected for special attention and about 90 per cent of the traders were visited. About 30 per cent in the other parts of the district were visited. During the year a total of 48 cases were reported for prosecution and, of these, 22 were settled on the basis of payment of outstanding tax and interest, together with a sum for compromise penalties, but, in 26 cases, we took successful penalty proceedings.

552. Could you give us any idea of the figures involved in these cases?—I have not got them with me. I just have the total number of cases. Would you like me to send you a note?*

Yes. That would be satisfactory.—I might say that the investigation of discrepancies between turnover tax returns and accounts furnished for income tax brought to light one substantial income tax evasion and has helped in the investigation of another.

If you would give us an indication of the extent of the default that would help?—As a matter of fact, on that point it is interesting that the relationship between the yield from the turnover tax and the figures for consumer expenditure, as compiled by the Central Statistics Office, is kept under constant review and it is evident from this comparison that any evasion of turnover tax, which may exist, must be on a small scale.

553. In the Vote itself, in the second paragraph of “Extra Remuneration” it is stated that customs and excise staff, tax staff, general service staff receive overtime and gratuities and other rewards for the detection of smuggling and other Revenue offences. It would seem—it is impossible to judge from that paragraph—that 1,162 people received something extra out of a total staff of 3,369. That means that onethird of the staff employed by the Revenue Commissioners received something extra under these headings. Could we have any breakdown as to how this money was expended on overtime, gratuities, smuggling and revenue evasion?—I can give you that. First, 14 members of the Customs and Excise Special Inquiry staff received what we call annual allowances. These are charged under subhead A. They are paid for the nature of the work. They cover a surveyor, officers of Customs and Excise, a chief preventive officer, a preventive officer and an assistant preventive officer. In point of fact the people chiefly concerned are the officers of Customs and Excise. In the list I have before me there are only one surveyor, one chief preventive officer, one preventive officer and one assistant preventive officer. The annual allowances are, as I said, payable on account of the nature of the work because these Customs and Excise people on the Special Inquiry staff are out at all hours. They have no fixed hours at all. They get no overtime pay. As well as these annual allowances payable to the Special Inquiry staff of the Customs and Excise, there is an annual gratuity of £50, which may be paid half yearly in arrears, to each officer of the branch, subject to certification, for meritorious service. In the year 1965-66 the total allowances paid to all members amounted to £2,150 1s. 8d. and gratuities totalled £523 1s. 7d. As regards the question of overtime, I shall give you the figure in a moment. You see there in that paragraph the figure £681. This was overtime paid in 1965-66 to an officer of Customs and Excise at Castleblayney. It is really the most economical way of staffing and paying for that customs station. It is what we call a single officer station. In other words, he has no colleagues or helpers at all. He works a full six day week. He may be required to work also on Sundays. There is frequent attendance required of him outside authorised hours which has to be granted on what we call merchants requests. The next component of this note about extra remuneration is seizure awards in the Customs and Excise which are payable in accordance with the prescribed scale.

554. We go on then to the Assistant Secretary referred to. He is the Assistant Secretary in charge of turnover tax. He received a gratuity at the rate of £250 per annum with effect from 1st of April, 1963, in respect of special duties performed by him in connection with the initiation and putting into operation of the turnover tax. I hope I will be permitted to say that representatives of industry and commerce, who are completely unconnected with the Civil Service, have of their own volition approached me and given extremely high praise to the services of this officer in the initiation and launching of the turnover tax. As well as the normal task of co-operation in shaping details of the tax and in the drafting of the legislation, he went around the country and addressed chambers of commerce and like bodies and then stood up to answer any questions or difficulties they might have. He was available at all times to these people with his assistance. Incidentally, I might say, he got no holidays. This gratuity was continued for 1965-66 when the Assistant Secretary in question was assigned specifically to the work of setting up a definitive scheme of staffing to cover the central collection branch, the arrears branch and the turnover tax branch. On the heels of all that, the wholesale tax was introduced by the second Finance Act, 1966, and that fell to his lot as well. He is now involved in this decision of ours to install a new electronic apparatus in the summer of this year and to mechanise, as I have explained, the bulk work in relation to Pay As You Earn.

555. An inspector of taxes and a higher staff officer received gratuities of £150 each for special services rendered by them in connection with the introduction of the computer system. An inspector in the Customs and Excise received a pensionable allowance of £300 by reason of the quality and responsibility of his work which involved over-all supervision of preventive staff work and Special Inquiry work. The final item is that a higher executive officer received a gratuity of £100 from the Department of Finance in recognition of the value of his services while temporarily assigned to that Department.

556. I have not given you the figure for overtime. I can give that to you now. You will recall that on the 14th of February, 1963, I undertook to this Committee that no officer in the clerical grades should be allowed to draw more than £200 overtime in any period of 12 months. Recently, I have had to raise that figure to £300 because, as you know, since 1963 the overtime rates for clerical grades were raised by almost 50 per cent and the £200 limit required revision. I agreed to raise the limit to £300. During the year 1965-66 the number of people who exceeded the £200 maximum was 70. It is relevant to associate that figure with the average number of vacancies in the Office for the year, which was 100. The largest single segment of overtime costs in the Revenue is that incurred by the necessity to employ preventive officers outside normal hours on revenue protection duties, especially at the land frontier, and on the clearance of sea, road, rail and air traffic. Insofar as Sunday attendance is necessary—and I am afraid Sunday attendance is quite substantial—it is paid for at special overtime rates. But we stagger weekday hours of attendance where practicable and economical so as to eliminate overtime. In general, in our circumstances, the provision of overtime constitutes the most economical provision for the work. In the year 1965-66, you might be interested to know that the overtime paid in the Customs was £131,320 but we must set against that figure the sum of £68,382 which we recovered from merchants in respect of extra attendance and services given by the Customs and Excise staff. If you would allow me just to amplify it by saying that increase in overtime in the Customs in 1965-66 over 1964-65 was largely due to the opening of four new frontier posts, the station at Alexandra Quay and the opening of new car ferry services at Dublin and Rosslare. The figure for Customs rewards for the year is £2,958.

Deputy P. Hogan.—That is for detection of smuggling and so on?—Yes, that kind of thing.

Chairman.—Thank you very much. We are very much obliged to you.

The witness withdrew.

VOTE 21—OFFICE OF THE MINISTER FOR JUSTICE.

Mr. P. Berry called and examined.

557. Chairman.—Before we take up the Vote itself, Mr. Berry, a question arose here on the occasion of Mr. Mundow’s appearance before the Committee in respect of Templemore Garda Training Depot. During his evidence he intimated to the Committee that the Department of Justice had engaged consultants of their own to advise them about the swimming pool installed there. Have you any information or any report from them since in regard to that matter?—I did not anticipate this but I think I could give you some information. As the Committee knows, defects showed themselves in the base of the pool and that continued for some months. Under the terms of the contract, of course, any repairs that had to be done and any costs incurred were a matter for the contractors so that in effect we have lost nothing beyond the delay in having the pool properly fixed up. Last July the pool was finally sealed off and has been in use since that but we consulted both the Department of Local Government and the Office of Public Works as to whether it would be prudent to call in outside consultants to make certain that it was now definitely sealed for all time. We were advised by both Departments that it would be a prudent course and the Office of Public Works gave us the name of a consultant firm outside and they advised us as to the scale of fees. We have a consultant engaged as from this week in examining the construction of the pool.

558. Perhaps at a later stage you might care to comment by way of note on these but some of the queries that arose included whether you were satisfied with the design in the first instance and there was also the question as to whether the construction and the reconstruction have now been satisfactorily dealt with and whether any action is likely to be taken against the architects or contractors in this matter? We appreciate that you might be at a disadvantage in attempting to deal with these queries at this moment.—In view of the difficulty experienced in having the defect located and repaired, it was decided, following consultation with the Chief State Solicitor’s Office, the Office of Public Works and the Department of Local Government, to engage an independent consulting engineer to examine the design etc. of the pool with a view to determining whether the design and construction were adequate and, if not, what further steps should be taken to safeguard the State against any loss that may arise in future. The sanction of the Minister for Finance was obtained to the employment of a consultant on terms to be advised by the office of Public Works. A firm suggested by the Office of Public Works, has agreed to undertake the investigation. Only this week has the consultant been appointed and we must await his report.

559. Paragraph 31 of the Report of the Comptroller and Auditor General on page 15 reads as follows:

“Subhead F.—Legal Aid

31. The charge to the subhead represents expenditure under the Criminal Justice (Legal Aid) Act, 1962 which was brought into operation with effect from 1 April 1965 by the Criminal Justice (Legal Aid) Act, 1962 (Commencement) Order, 1965. Under the provisions of the Act and subject to its requirements a court may grant a certificate for free legal aid.”

Have you anything to add, Mr. Suttle?

Mr. Suttle.—No. This is for the information of the Committee.

560. Chairman.—On the Vote itself, in regard to subhead B—Travelling and Incidental Expenses—the saving is a significant portion of the provision. Were there any particular circumstances connected with that saving?—No. We had anticipated that our Inspectors of Circuit Court Offices and our Inspectors of District Court Offices would do their normal travelling but during the year we had a vacancy in two of these posts.

561. Deputy P. Hogan.— May we come back to subhead A—Salaries, Wages and Allowances? There has been a substantial increase in salaries etc. from £161,000 in the previous year to £201,000 and apparently there has been only a small increase in staff. I take it that this was due almost entirely to salary and wage increases?—The salary and wage increases were the normal ones. There is nothing unprecedented.

I am aware of that, but I take it the increase was due almost entirely to salaries and wages?—Yes.

562. Chairman.—On Appropriations in Aid—in item No. 2 there is reference to £445 received from charges for searches and from lettings of theatre in Office of Film Censor. Is that a new item?—It is. Our staff make searches for Telefís Éireann in relation to cuts. They exhibit a lot of films which already have been vetted in the Film Censor’s Office. We charge £1 for each search in relation to that. We charge a rental to outside people like the Department of External Affairs for use of our little theatre, but the great bulk is for the searches. This is a new item.

VOTE 22—GARDA SÍOCHÁNA.

Mr. P. Berry further examined.

563. Chairman.—Paragraph 32 of the Report of the Comptroller and Auditor General reads as follows:—

“Subhead B.—Travelling and Incidental Expenses

32. Gardaí on duty away from their permanent stations are entitled under the terms of the Garda Síochána Allowances (Consolidation) Order, 1965 to subsistence at rates which vary according to the length of the period of absence and whether they are, or are not, regarded as on temporary transfer. I have asked for an explanation for the payment of subsistence at different rates to a number of Gardaí who were away from their permanent stations for a period of nine nights on what appeared to be identical duties. I have asked also if the term “temporary transfer” has been defined for the purpose of the Order.”

564. Have you anything to add, Mr. Suttle?

Mr. Suttle.—While the amounts involved are relatively small I raise this question because of the absence of guidelines as to which rate should apply in any particular case. I am informed by the Accounting Officer that the term “temporary transfer” has not been defined statutorily as it is considered more appropriate to regulate the question administratively. Directions are, however, being issued to the force setting out the principle to be followed in future.

565. Chairman.—On subhead C.—Post Office Services—is the phone being used more than usual?—No. The charges have been increased.

566. On subhead D.—Clothing and Equipment—and subhead E.—Station Services— the expenditure was less under each of these headings. Were there any particular factors causing this?—The expenditure was less on clothing and equipment because we took in fewer recruits; it was also less because of items ordered not being delivered before the end of the year. Recruitment was 358 as against 470 provided for at a cost of £54 each. I should say that the reason why the recruitment was less was that there were fewer retirements. The guards can opt to retire within quite a spell of their service. Once they have 30 years’ service and are over 50 years of age they can then opt to retire. However, when negotiations are in progress for increases in pay they do not retire. That is the reason why about 120 did not retire during this period.

567. On subhead I.—Appropriations in Aid—in item No. 3, miscellaneous receipts, the increase is roughly £9,000. Under what headings did you get more than anticipated? —I am told it was increased sales at auctions. £9,000 is a comparatively small sum.

I presume it is the proceeds of the sales of old stores and cast uniforms and forfeited and unclaimed property?—There are also payments for services rendered by the Garda Síochána amounting to £10,996. I gave the Public Accounts Committee a fairly detailed statement in earlier years, but we increased the rate. According as pay goes up the rate goes up.

568. Deputy P. Hogan.—In regard to payments from the Road Fund, item 2 of the Appropriations in Aid, are these payments made for duties carried out by Gardaí?

Chairman.—Are these payments recovered from the local authority?—Yes. We recover the partial cost of the services of the Gardaí who are engaged on traffic duties. We get 1½ per cent of the Road Fund plus the fines. For instance, the fines in 1966 amounted to £130,000 plus the fines on the spot which amounted to about £66,000. These partly pay—they do not fully recompense us for the services of the Gardaí throughout the country on road traffic duties.

569. On the Garda Síochána Reward Fund, would civilians qualify to get anything from this Reward Fund?—No. This is for good police duty. The amount is made up from fees received from Weights and Measures plus fines on Gardaí for neglect of duty and things like that. There is a board established at Garda headquarters under the regulations which looks at the duties performed by Gardaí of all the different ranks right up to the rank of Chief Superintendent, and they allocate the amount.

VOTE 23—PRISONS.

Mr. P. Berry further examined.

570. Chairman.—On subhead E.—Manufacturing Department and Farm—why was the expenditure there less than anticipated? —I think it was pretty good estimation, only £3,000 out on a £31,000 Estimate. We realised £1,500 on the farm. The materials for the manufacture of uniforms were not purchased. Materials for mat making were not delivered in time. The industry was continued with the stock in hands, but there was a slight decrease also in the price of timber supplied to us. I do not think there is anything unusual in the item.

571. Chairman.—What size is the farm? —It is 30 acres and we realise about £1,500, that is before taking into account the cost of fertilisers, and seed, and the horse, and things like that.

572. With regard to the Appropriations in Aid, the receipts from the manufacturing department and farm show a very favourable turnover. How do the goods and products compare in price and quality with those outside?—We charge market prices as far as possible. We are, of course, limited in the range of articles we can supply. For instance, the kind of work carried out is bag-making, mat-making, laundry work, carpentry, woodcutting, tailoring and needlework, baking, and agricultural work on the farm. All payments for materials—bags, flour, timber, cloth for manufacture—are shown as well as sales to Government Departments and sales to the public. The prices charged are determined as follows: the price of bread is based on the cost of the flour used, fuel, etc., plus 2½ per cent; uniforms and footwear, the cost of the raw materials plus 5 per cent; firewood, the cost of the timber plus 20 per cent. The wear and tear on tools, and so on, is also taken into account; weaving, the cost of the raw material plus 2½ per cent. The price of the prison made article sold to the public is based on the local market price.

VOTE 26—COURTS.

Mr. P. Berry further examined.

573. Chairman.—In regard to subhead C. —Post Office Services—the saving there is considerable. In what way does the Department of Posts and Telegraphs charge for the services they provide?—This is a figure that is supplied to us and we accept it.

The expenditure in 1964-65 was £20,000 and expenditure in this year was down?—It arises from an overestimation in the Post Office accounts. We take their figures. It is merely an adjustment.

The Department of Justice just takes the figure given by the Department of Posts and Telegraphs?—They give us a figure in October of each year for the following year and they may be out, as they are here, through overestimation.

574. Deputy P. Hogan.—I am interested in the actual expenditure in 1964-65. The actual expenditure was £20,000 and this year it is £9.7 thousand. It is down by 50 per cent. That is, of course, very commendable, but I am wondering rather why there should be such a decrease as 50 per cent?— I have not got the answer. Perhaps I could, if the Chairman wishes, send you a note. We will have to ask the Department of Posts and Telegraphs.*

VOTE 25—LAND REGISTRY AND REGISTRY OF DEEDS.

Mr. P. Berry, called.

No questions.

The witness withdrew.

The Committee adjourned.

*See Appendix XXXIV.

*See Appendix XXXV.

*See Appendix XXXVI.

*See Appendix XXXVII.