Committee Reports > List of Committees > Dáil > 1969 > Committee of Public Accounts > Report - Appropriation Accounts 1967 - 1968

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 13 Márta, 1969.

Thursday, 13th March, 1969.

The Committee met at 11 a.m.

Mr. E. F. Suttle (An tÁrd-Reachtaire Cúntas agus Ciste) and Miss M. Bhreathnach and Mr. L. O’Neill (An Roinn Airgeadais) called and examined.

VOTE 34—LANDS.

Mr. T. O’Brien called and examined.

801. Chairman.—Paragraph 44 of the Comptroller and Auditor General’s Report reads as follows:

“Subhead G.—Purchase of Interests for Cash, Advances for purchase of Land and Auctioneers’ Commission

44. The Land Act, 1965 empowers the Land Commission to make repayable advances to enable progressive small-holders to improve their status by the purchase of suitable farms of their own choice in the open market. The existing holdings must be situated in a congested area, be suitable for land settlement purposes and be sold to the Land Commission as part of the loan arrangements. £20,450 advanced in the year was in respect of the first five cases dealt with under this self-migration scheme.”

802. Paragraph 45 of the Comptroller and Auditor General’s Report reads as follows:

“45. The same Act authorises the granting of life annuities to vendors who are elderly, incapacitated or blind, in lieu of payment in cash of the whole or part of the purchase price of an interest in land sold voluntarily to the Land Commission. The first five cases involving a total purchase price of £20,275 were completed during the year; £11,100 was paid in cash and the balance dealt with under the annuity scheme.”

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

Mr. Suttle.—Paragraphs 44 and 45 both provide information regarding the progress of two new schemes initiated to facilitate the Land Commission’s programme of land structure reform.

804. Chairman.—Five cases were dealt with so far, Mr. O’Brien?

Mr. O’Brien.—Both schemes were introduced as entirely new features of the Land Act, 1965. In relation to paragraph 44 the over-all situation as of now is that we received 136 applications for self-migration loans and of those half were rejected in the first instance and, of the remainder, price agreement has been reached in 19 cases. Of those 19, 12 people are searching for new holdings of their choice and seven cases have been completed. The 12 who are looking for holdings of their own choice are given a period of a year to shop around and look for a holding to which they will elect to go. In the seven cases completed an area of approximately 300 acres was purchased at a total sum of £22,000. The advances we have made totalled £26,800, with the aid of which self-migrants purchased an aggregate of 840 acres at a total price of £54,000; in the over-all, the seven people have raised themselves from 300 acres to 840 acres. Twelve others have been progressing and they are engaged in searching out their new holdings. The seven cases which have been completed came from the following counties: three from Roscommon, one from Mayo, one from Clare, one from Kerry and one from Cork; of the 12 other cases three are from Mayo, three from Leitrim, three from Cork, two from Galway and one from Clare. These cases are confined entirely to the congested districts.

805. Deputy P. J. Burke.—What is the position in regard to increasing holdings to 45 acres? Have you succeeded in increasing many?—Yes, we have. Last year we provided 80 new holdings for migrants. Some of the normal ones would be of the 45 acre standard and some others would have been above that, from 70 to 80 acres or upwards.

806. The scheme is going reasonably well?—Reasonably well. In the ordinary process the Land Commission allotted a total of 28,500 acres that year to 1,550 allottees; that would be the over-all division. Of course, as yet the self-migration scheme contributes merely in a limited way to this. The second scheme referred to at paragraph 45 is what is popularly known as the pension scheme. The situation in regard to that is that we received 360 applications, 150 were rejected, price agreement was reached in 34 cases and of these 17 are actually on pension so we have 17 pensioners on our books now. The remaining 17 are at various stages leading up to pension.

807. Deputy Briscoe.—Where do these people live when they sell their farms?— If they wish we allow them to retain the house and garden for their lifetime—in fact that is one of the attractive features of the scheme.

808. Deputy P. J. Burke.—That is very fair. We are all interested in this scheme. Why were 150 turned down?—My recollection is that their lands were quite unsuitable. They were in very backward places and we would not have got anybody else to take them.

809. Chairman.—They would have no interest for you for land settlement purposes?—No. It is not that all the others were unsuccessful. In fact as many as 67 of them after opting out of the pension scheme offered us their land for straight cash or land bonds and they are being examined on that basis.

Deputy P. J. Burke.—I would have expected that there would have been more applications under this scheme.

810. Deputy Briscoe.—How does land for sale come to your attention? Do you advertise?—One of our best sources of information are Deputies of Dáil Éireann. There is also the public press and then people in the locality who would be aware that a property was for sale would write and tell us. We also have a number of inspectors in each area who watch the local papers and are conversant with impending auctions.

811. In other words, if an inspector calls to a farm and sees that it is not capable of being run by the people living there, he might suggest to them that they should offer it to you?—Exactly. In the case of the pension scheme there is usually a direct written offer. For the information of the Committee the pensions vary from £79 to £903 per annum. For example, the owner of a property worth £4,000, which would be a smallish property by modern standards, aged 65 and single with no dependant would be eligible for a pension of £534 per annum, that is just over £10 a week. In the case of a married farmer aged 65 with a wife aged 55 still living, for their joint lives there would be a primary pension of £450 and after the death of either the survivor would have a secondary pension of half that, i.e., £225.

812. Who arrives at those figures? Do you have actuaries working on them?—Yes; they are based on life expectancy tables and are calculated actuarially.

813. Chairman.—Paragraph 46 of the Report of the Comptroller and Auditor General reads as follows:

“Subhead L.—Game and Wildlife Development

46. The Joint Committee on Game Development, referred to in paragraph 36 of my previous report, instituted a scheme to assist financially owners of private estates to develop covert shooting for the purpose of selling this attraction to tourists. Under the scheme an estate owner providing gun-days for sale to tourists was entitled to purchase game chicks at subsidised prices, to grants towards the cost of rearing them and was guaranteed one half of the expected fees for tourist gun-days remaining unsold by 1 October 1967. Of 88 approved gun-days provided by seven estate owners 81 were unsold at 1 October 1967 and compensation amounting to £1,892 fell to be paid under the guarantee arrangements. In addition £2,116 was paid as chick subsidies and £538 as rearing grants.”

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

Mr. Suttle.—The first year of operation of this new scheme has not proved very successful. I understand that the scheme has been modified in some respects for the 1968-69 season. An amount of £200 due to one estate owner was not claimed so that the final amount actually paid under the guarantee arrangements was £1,692.

815. Deputy Healy.—This is a new scheme. I presume it has teething troubles?

Mr. O’Brien.—That is right; it was initially a promotional undertaking. We would have been far more successful in that particular year were it not for the fact that we were hit by the foot and mouth disease.

Mr. Suttle.—That did not take place until after the closing of the scheme?

Mr. O’Brien.—I agree. The guaranteed period closed on 1st October and the foot and mouth did not hit until mid November I think. Still, we believe that what would have happened, even indirectly, from November on could have helped us in a big way.

Mr. Suttle.—But it would not have affected this scheme because this scheme was closed down in October. Everything finished at that stage?

Mr. O’Brien.—Yes. The guarantee really had to come into effect. Still the scheme was worth trying; it would be unfortunate if Ireland could offer no large-scale shooting.

816. Chairman.—Last year the Committee raised the matter of the expense of the collection of small annuities.

Mr. Suttle.—This is carrying on from the Finance minute. We had a Finance minute on last year’s accounts.

Mr. O’Brien.—I do not think I have seen it.

Mr. Suttle.—I mentioned in my previous report the possibility of redeeming small annuities in the interest of economy in administration. Subsequently, a pilot scheme was undertaken in Co. Donegal where there was a preponderance of small cases and it will be seen from page 5 of the Department of Finance minute on the Committee’s 1966-67 Report that 317 invitations to redeem annuities ranging up to 5/- were issued and that there were 42 redemptions, a 13 per cent result. There are some 95,000 annuitants in the Counties of Donegal and Mayo alone who pay an average of 11/each half year. If the 13 per cent redemption rates were applied to all these it would mean that more than 12,000 annuities would be redeemed. Even on the computerised system there are considerable costs for stationery, postage and wages of clerical operators; redemptions of the order mentioned would, it appears to me, result in a worthwhile saving. Taking an average payment of 11/- each half year by 95,000 annuitants, the cost of postage alone would be 1/- each twice yearly.

817. Would you like to comment further on this, Mr. O’Brien?

Mr. O’Brien.—I dealt with this matter fairly fully when I appeared before the Committee last year. Personally, I took the view that the thing was scarcely worthwhile at all and that 13 per cent was a very poor response. While it would be easy enough for us to say that £5 or £10 would redeem an annuity of 10/-, which it will, still, when we went in search of it we found that people would prefer to pay the 5/- or 10/annually rather than the £5 or £10 cash sum.

Mr. Suttle.—It is only a comparatively small pilot scheme. There were only 317 people invited and the annuities were up to 5/-. If that were extended to 10/——

Mr. O’Brien.—If it were extended to 10/-, my own personal view is that the result would probably be less than 13 per cent.

Mr. Suttle.—It is a very small annuity from the point of view of the cost of administration.

Mr. O’Brien.—It is not difficult for us to manage since they are all merged in the computer and whether the computer does 490 or 4,900 is only a matter of minutes.

Mr. Suttle.—From the point of view of direct expense, even postage alone, it would be considerable.

818. Deputy Briscoe.—This is an annuity paid to the Land Commission by small farmers on the purchase price of the land, and you are trying to settle with them by asking them to pay a lump sum?——

Mr. OBrien.—That is what the Comptroller and Auditor General was suggesting.

Mr. Suttle.—We put this suggestion to the Accounting Officer and he operated a pilot scheme and notified 317 people that they could redeem their annuity for a certain sum of money. Of those people only 42 replied and accepted the invitation. That was on annuities up to 5/-. I feel that if the scheme was extended further into, say, Donegal, Mayo and possibly Galway, and if the figure of 5/- were increased to 10/-, you might get a far bigger return. The Accounting Officer does not agree with me on that.

Mr. O’Brien.—It is entirely a matter of opinion. The point I am making is that where these small annuities are payable it is generally by very small and less well-off farmers who do not have these capital sums. I agree with the Comptroller and Auditor General that they are small but the fact of the matter is that they do not have these capital sums.

819. Deputy Briscoe.—They are required to pay this for how long?

Mr. O’Brien.—For a period of about 60 years. It is much the same as when a person redeems a housing loan to Dublin Corporation or any other corporation. Whereas the sum may appear to be small, the payees would prefer to pay the small premiums rather than the capital sum.

Mr. Suttle.—What would the redemption value be, roughly, of, say, a 1903 annuity of, say 10/-?

Mr. O’Brien.—In that case the redemption value would be quite small by now.

Mr. Suttle.—Have you any idea what it would be, roughly?

Mr. O’Brien.—The redemption value of a 5/- annuity would be now about £2 or £3 but there would be very few of those.

Mr. Suttle.—Even at 10/-, doubling that up, it would be only £5 or £6, at most?

Mr. O’Brien.—We have made the offer and this is the only result we have got.

820. Deputy Briscoe.—Is there any cost involved in the collection of these annuities?

Mr. O’Brien.—They are included in a computer collection.

Mr. Suttle.—There is the postage cost both ways.

Mr. O’Brien.—I now see the Department of Finance minute records that the Land Commission consider that if the experiment were extended the amount of work involved in extracting particulars and calculating the redemption values would largely offset the benefit accruing, particularly since clerical work connected with accounts is carried out by computer.

Mr. Suttle.—Would not the computer produce all the figures for you?

Mr. O’Brien.—No; the computer would not calculate the redemption values.

Mr. Suttle.—It could be programmed to do that. It could be programmed to do everything?

Mr. O’Brien.—Yes, but setting up the programme would be very costly. I have no strong feeling about it, whether we try it or not. I certainly told the Committee last year that we would make the pilot effort and we did make it and this 13% was the response.

821. Deputy Briscoe.—How many people are there paying annuities?

Mr. Suttle.—There are half a million accounts.

Mr. O’Brien.—I had relevant figures for that last year.

Deputy Briscoe.—The Comptroller and Auditor General says half a million?

Mr. O’Brien.—Half a million accounts altogether. Our collection of land annuities is one of the best collections in the country. I can tell this to the Committee because I know the figures—I looked them up only this morning, curiously enough. From 1933, when the land annuities were halved at the commencement of the economic war, up to May, 1968, that is a period of 35 years, the total collectible land annuity was £87,474,000 and we have in fact collected £87,430,000— a 99.9 per cent collection, showing an arrear of only £44,000 over a period of 35 years and that £44,000 is largely attributable to islands off the west coast where neither rates nor annuity are paid. We have a near perfect collection system.

822. Deputy P. J. Burke.—It is wonderful. You have a number of holdings that are completely bought out, have you?—We have, under the earlier Acts.

823. Roughly how many? I do not want details.—That have already been bought out? I should say at the moment about 36,000 or 37,000, and from now on they will be increasing each year. In the normal way the annuities under the earlier Acts of 1881 and 1891 would have been paid before now but there was an extension given from 49 years to 79 years by means of three decadal reductions and a lot of the tenants of the day accepted these reductions.

824. Deputy Briscoe.—Have you any idea as to what the overheads would be for postage, to which the Comptroller and Auditor General referred, and the total cost of collection of these annuities?—The total cost of collection, I know it is about five per cent.

Mr. Suttle.—Of the total.

Mr. O’Brien.—Of the total, yes.

Mr. Suttle.—There would be the same cost on a £10 annuity as on a 5/- annuity.

825. Deputy Briscoe.—Your idea was to confine that just to 5/- annuities or were you going up higher?

Mr. Suttle.—I was suggesting up to 10/-.

826. Deputy Briscoe.—How many people are there on 10/-?

Mr. Suttle.—The figure I have here is that as between Mayo and Donegal there are 95,000 people paying on average 11/each half year. The redemption value of a number of these would be from £5 to £6.

Mr. O’Brien.—That still seems to be a fair bit of cash. Our experience anyway is that the person would prefer to pay the 10/- for a term of years.

827. Deputy Briscoe.—They would be very suspicious of any effort to get them to pay this?

Mr. O’Brien.—That is right; there are farmers who prefer to be paying land annuities. They get their receivable order and they seem to equate this with title to the holding.

828. Deputy P. J. Burke.—Furthermore, if they are still tenants of the Land Commission they have a chance of getting more land, and so on? Yes. Would you leave it for another year to the Comptroller and myself?

Deputy Briscoe.—That would be an excellent idea.

Mr. Suttle.—I think the 317 is a comparatively small number out of 500,000.

Mr. O’Brien.—Possibly I should have anticipated this might come up again but I really did not. I do know we have all these statistics relating to what we did.

Mr. Suttle.—With the computers it should be possible to produce all the figures you need, redemption values and everything else.

Deputy P. J. Burke.—I suggest the Comptroller and Auditor General and Mr. O’Brien should be able to work this out.

829. Chairman.—We shall leave it then for the present. Let us turn to the Vote on page 80. On subhead D.—Statutory Contributions to Land Bond Fund, Local Loans Fund and Church Temporalities Fund— could you give us an explanation of this? There are about six items under this heading which I do not exactly understand?

Mr. O’Brien.—Yes, there are six items under D. First, there is interest and sinking fund on land bonds issued as a contribution to the price of tenanted land and for the purposes of the costs fund. The first of the two items was a ten per cent bonus payment to landlords under the Land Act of 1923 by way of inducement to them to sell their properties.

830. That was with a view to land resettlement when the State was founded?— It was the final act in relation to the purchase of landlords’ tenanted estates and this ten per cent bonus, was, of course, over and above the ordinary purchase price. The tenants were not liable for it and so the State had to accept liability for the interest and sinking fund. I should think that the total purchase price for tenanted land was £22 million, so the bonus payment would have been about £2 million and this sum of £124,000 here in subhead D represents the interest and sinking fund towards the amortisation of that capital sum as well as the sum required to service bonds issued to the costs fund.

831. That will be wiped out eventually? —It will, yes.

832. How long would you estimate it has to run still?—Up to about the year 2000; it would have another 32 years to run.

Is it a diminishing moiety each year?—It was cumulative for quite a while, but it has almost stopped being cumulative. There are no additions being made to it now except for the costs fund.

833. What is the second item?—This is interest and sinking fund on the irrecoverable portion of advances made to co-operative farming societies. This is a rather old provision arising from the troubled period of the early Twenties when, following the First World War, land went at an extraordinarily inflated price, and a lot of farmers grouped together on a co-operative basis and bought land at this exorbitant price. As time passed and agricultural prices dropped they found that they had completely exceeded anything like a realistic value for the land they had purchased, and the prices they were getting for agricultural produce were not able to meet the outgoings. They had gone to the banks to get this money and there was serious indebtedness to the banks, so in the Land Act, 1927 a section was introduced which enabled the Land Commission to come to their aid, and it came to their aid by taking responsibility for the excess over and above the economic security of the land. The Land Commission accepted liability for this excess, repayment of which is financed through item 2 of this subhead.

Mr. Suttle.—That would cover the old Land Bank cases?

Mr. O’Brien.—Yes.

834. Chairman.—That would be the present Chase Bank?

Mr. O’Brien.—Yes, but I think it was known as the National Land Bank Ltd. at that time. The only other big item in the the subhead is the sum of £989,000, almost £1 million, which is to meet deficiencies arising from the revision of annuities under the Act of 1933. The position is that all round the tenants pay half, and the State pays the other half in relation to annuities under the 1923 Act only. Annuities under Acts prior to the 1923 Act go into the purchase annuities fund. After the annuities as a whole were no longer payable to Britain they were halved and the Land Bond Fund for the 1923 Act had to be kept solvent by making good to it the cost of the revision. The tenants pay one-half and the State pays one-half and this is the State’s contribution towards that half. It has been growing each year.

835. Deputy Briscoe.—This money is paid by whom?—By the taxpayer.

To whom?—To the Land Bond Fund.

Mr. Suttle.—Land Bonds are held by private individuals and are redeemed annually out of the fund.

Deputy Briscoe.—I understand. They have to get something from their investment.

836. Chairman.—In regard to subhead G —Purchase of Interests for Cash, Advances for Purchase of Land and Auctioneers’ Commission—I take it that the purchase of land by the Land Commission is by cash or land bonds?

Mr. O’Brien.—That is right. This particular subhead relates to cash only.

837. Does it amount roughly to half cash and half land bonds?—No. We would issue about £1.6 millions in bonds and only about £400,000 in cash.

838. Deputy P. J. Burke.—If you take the case of an absentee smallholder who wants to sell for cash and not for land bonds do you try to meet him?—We would be inclined to give cash if he sells voluntarily but if he were not selling, if he were over, say, in Birmingham, and insisted on retaining his land and we had to institute compulsory proceedings against him then we would be obliged to pay him in bonds. If in the course of negotiations he finds that he really has to part with the land we would, in small cases, without prejudice to our right to acquire the land compulsorily, decide to do a deal with him on a voluntary basis and pay cash.

839. Deputy Briscoe.—Is there any difficulty selling land bonds on the Stock Exchange?—Strictly speaking there should not be. They are quoted regularly on the Stock Exchange but of course like any other giltedge security they recently have not been doing so well. We are obliged to fix interest rates which will keep them at or near par for a reasonable time after creation. Since the first of this year we have 8 per cent Land Bonds which should remain at or near par for a reasonable time. Bonds are readily negotiable on the Stock Exchange. I do not think our Accountant has experienced any difficulty in the sale of them. The bonds are guaranteed as to interest and redemption at par but they are not guaranteed against the day-to-day fluctuations of the Stock Exchange.

840. There is a redemption date?—They are but loosely dated for redemption purposes.

Mr. Suttle.—There is a lottery held each year and some of each denomination are drawn out so that you could buy £100 worth of 3 per cent bonds for £40 on the market and then the next week if you were lucky you might get your entire £100 back.

Mr. O’Brien.—I was looking at Iris Oifigiúil and I see that there will be a draw on the 15th April and that now there is only £88,000 worth of 3 per cent Bonds outstanding and £6,000 of them are going to be drawn.

Mr. Suttle.—Somebody is lucky.

Mr. O’Brien.—At the moment they are quoted at about 62. The Accountant tells me that nobody will sell them at this stage.

VOTE 35—FORESTRY.

Mr. T. O’Brien further examined.

841. Chairman.—In regard to subhead C. 1—Acquisition of Land (Grant-in-Aid)— I understand that there has been some slight falling off in the acreage over the past couple of years?—There has been. That particular year we acquired 17,574 acres for a price of £123,261, that is just about £7 per acre; the price level may have been partly our difficulty. There is a Motion in Dáil Éireann at the moment and it is being explained that there is a new valuation system now in operation for the purchase of forest land, one which is based on the establishment of a cost-benefit type analysis of each new area of land being included in the forest estate as the basis for optimum management policies. With the aid of detailed costing information built up over the past decade, each area being considered is now studied in relation to both its potential timber yield and the level of capital development cost likely to be involved. On this basis a price is determined which recognises its fair value for forestry purposes. Under the new system, the range of prices which we are prepared to offer is much wider than under the old £10 ceiling price system. Land of relatively low productive capacity will still command only a very low price, if it qualifies at all for purchase. For good forest land, however, valuations now range frequently up to twice the old ceiling price and, in favourable circumstances when capital development costs will be minimal, may go substantially higher. Exceptionally attractive parts of blocks on offer have, in fact, on occasions been valued at figures of over £25 under the new system. This does not mean, of course, that every farmer selling land to the Forestry Division can hope to get prices up into that bracket. It does mean, however, that any farmer can with confidence expect to get a fair market price for any land which, in the national interest, would be better devoted to forestry than to agricultural purposes. To put it simply, price should no longer be an obstacle to land acquisition for forestry purposes. That is our hope anyway.

Chairman.—You will have a more flexible system.

842. Deputy P. J. Burke.—It would be hard to get land now at £7 an acre?—It would; in this time of shrinking money values any property is valuable.

843. Deputy Briscoe.—Was the decision not to plant 25,000 acres a policy decision? —No. We were quite willing to plant 25,000 acres but we just did not have a sufficient reserve of plantable land to enable us to do it. We did have a sizable block of land, a reserve of 60,000 acres, but that was unevenly distributed; some of it was not, in fact, available because it was subject to grazing lettings. We did not find it possible to do the whole 25,000 acres in that particular year. However, we did 90 per cent of it.

844. Deputy P. J. Burke.—How many acres have you under forestry altogether?— The Department now owns 625,000 acres of land. Of that 550,000 acres are plantable and of that 490,000 acres have in fact been planted at 209 different centres throughout the country.

845. Deputy Briscoe.—How many acres were destroyed by fire last year?—686.

846. Is that plantable immediately?— These areas are replanted almost immediately.

847. The figure is quite low. Obviously that is an effect of the warnings issued?— There is a note at the top of page 85 that £25,693 was written off as a result of forest fires.

848. That would not be the actual loss, would it?—This would be the current value at the time of the fire. The biggest fire we had was unfortunately one of our own at Cloosh Valley in County Galway where 262 acres were damaged. What happened was that protective burning was being carried out in controlled conditions by our own employees and under the supervision of the Forester-in-Charge. The trouble was that some sparks jumped the fire-line and entered the forest. The forest vegetation was, at the time, extremely dry and consequently the fire had reached large proportions before being brought under control. In addition to the Forestry employees both from Cloosh Valley and adjoining forests, the Galway Fire Brigade, members of the Garda Síochána, Army personnel and members of the local community also assisted in extinguishing the fire. It is the opinion of the senior officers who investigated it that the protective burning was carried out under suitable conditions and that no question of negligence could be attributed to the Forestry staff. They also considered that, but for the prompt action in summoning assistance, the fire would have caused much more extensive damage. Protective burning has to be undertaken in the interests of protection and in full consciousness of the risk involved.

849. Do you have to pay the Department of Defence or the Department of Justice for the use of personnel at those fires?—I do not think so.

850. Chairman.—Subhead C.3 deals with sawmilling. What is the present position regarding the sawmills?—We have two established sawmills, one at Cong and one at Dundrum. Twenty-one people are employed at Cong and 23 at Dundrum. Fortunately in this particular year we had a net profit at both—£2,770 at Cong and £909 at Dundrum, a total of £3,679.

851. Deputy P. J. Burke.—I suppose as time goes on you expect to increase sales according as forests develop?—Yes, general sales. Sales to sawmills are in respect of the two fixed sawmills that we have.

852. Chairman.—Most of the timber is sold?—Yes. There are the two fixed sawmills. Apart from sales to local people, and builders’ providers, which are the main source of receipts here, there is a lot of material, fencing poles, portable shelters, notice boards and so on that we provide for the Department’s use and for which credit is not taken in this account at all.

853. Deputy P. J. Burke.—Are you selling timber to paper mills?—We are, yes. That appears in the Appropriations in Aid: forest receipts, estimated £600,000; realised, £634,000—on page 84. This reflects our main timber sales each year. Large sales are effected by means of tenders sought in the public press, small lots are sold locally by auction and, in addition, there are local sales of firewood at fixed prices. Christmas trees—22,000 that year—are sold at graded prices according to location and size of lot. The bigger the lot the lower the price. A lot of 1,000 trees would be cheaper than a lot of 100, that is, per tree. That is only a luxury trade and very seasonal. The main contribution is mature timber, thinnings, sold to the pulp-wood using factories; fencing posts, scaffolding poles; also we sell very good quality poles to the ESB and Post Office. Our total sales that year were 6.6 million cubic feet and of that 5.5 million cubic feet were under 8 inch— quarter girth. They would be largely thinnings that would go as Deputy Burke suggests to the factories and 1.1 million over 8 inch quarter girth that would be largely saw log constructional timber.

854. Deputy Briscoe.—Do you sell any timber to the chipboard factories?—We do. Almost our entire thinnings would go to the factories—I would say chipboard, wallboard and the paper mills at Clondalkin.

855. Deputy Briscoe.—With regard to subhead E.—Forestry Education—have you any shortage of trainees for forestry work?— No. We get about 300 applicants each year. We now have 82 in training, 30 in the first year at Kinnitty Castle near Birr, and 26 in second year and 26 in third year at Shelton Abbey, near Arklow. We have a total of 82 people in training at the moment and our present forester staff comes to a figure of 429.

You have all the people you want?—Yes.

856. With regard to subhead G.—John Fitzgerald Kennedy Memorial Park—I was in that park during the summer and it is very beautiful and has great potential. The time must be nearly right to have a children’s corner which would attract more people?—We are doing that this year; we are having a children’s corner. Within six months of the opening of the park there have been as many as 80,000 visitors and we have had to double or treble the car park space.

Deputy P. J. Burke.—You would need to provide a place for refreshments?—There is a fine picnic centre.

The witness withdrew.

VOTE 48—HEALTH.

Mr. P. S. Ó Muireadhaigh called and examined.

857. Chairman.—Paragraph 87 of the Report of the Comptroller and Auditor General is as follows:

“Subhead G.—Grants to Health Authorities

87. As stated in paragraph 82 of the previous report supplementary grants were paid to health authorities to ensure that the cost of approved health services falling on local rates in the year 1966-67 would not exceed that of 1965-66. Increased supplementary grants were payable for the year under review the effect of which would be to provide an average recoupment of 55.3 per cent of net health expenditure.”

Has the Comptroller and Auditor General anything to add to that paragraph?

Mr. Suttle.—I have nothing to add to the information contained in paragraph 87.

858. Paragraph 88 of the Report of the Comptroller and Auditor General reads:

“88. The accounts of the health authorities are audited by Local Government auditors whose reports are available to me. I noted comments in one case regarding the comparative costs of medicines in the various dispensary districts, the stock records in a central pharmacy and the records maintained for controlling hospital patients’ accounts. I have invited the observations of the Accounting Officer.”

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

Mr. Suttle.—The comparative costs of medicines to which I refer relate to various dispensary districts under the Dublin Health Authority. They range from an average cost of 6/9d. per person in a country dispensary district to £5 2s. 10d. per person in a city district. The Accounting Officer has informed me that these figures are extremes. The average for the Authority was £2 5s. 0d. per person covered by medical card in 1965-66. He explains that in country districts where there is not a constant demand for unusual and expensive medicines such items have frequently to be issued from the Central Pharmacy to the patient and are costed against the Central Pharmacy. The medicines issued at the country dispensary are dispensed by the doctor while in the city dispensary a pharmacist is employed and larger and more varied stocks are held. The medicines issued in the city dispensary include issues on prescriptions from hospitals (including the outpatient departments) while such demands would be very few in the country dispensary. These are often expensive medicines necessary for patients discharged from hospital. With regard to stocks of medicines the position is that the Central Pharmacy of the Dublin Health Authority was started in December, 1962, to centralise the purchase of medicines required by the Authority’s institutions and dispensaries. The expenditure rose from £280,000 in 1963-64 to £672,000 in 1967-68. I have been informed that records necessary for adequate stock control have been introduced since October, 1968. In the case of patients’ accounts a revised system of recording and checking has been in operation since August, 1967. Therefore faults found by the Local Government auditor have to a large extent been rectified.

860. Deputy Briscoe.—On subhead E.— Statutory Inquiries—what would the statutory inquiry be in this case?

Mr. Ó Muireadhaigh.—This is a token provision, which has been at £100 for many years, to cover costs of any inquiries which might be held into the manner in which an officer of a local authority was performing his functions. The last inquiry was in 196162. If there were an inquiry, the cost would be considerably more than the vote provision.

861. Chairman.—On subhead G.—Grants to Health Authorities—could you give us comparable figures over the past two or three years as to the amount contributed by the local authorities and by the State?— I am afraid I have not got it here.

Would you send it along?—Yes, certainly.*

862. Deputy Healy.—There was a long discussion on this at local level. What exactly was the result of that undertaking to freeze the amount payable by the local authorities? Was that only freezing it in certain directions?—No, the White Paper on the Health Services provided that there would be a freeze for one year only, 1966-67, pending further consideration of the most appropriate method of financing the health services. The White Paper committed the Government to a freeze in that year only.

863. But since then is it not a fact that up to 1965-66 the local authorities contribution was 50 per cent and now it levels out at somewhere around 43 to 47 per cent at the very most?—The local contribution? That is so. In the year with which we are dealing the health grant was made up of three elements: the statutory 50 per cent, a supplementary grant equivalent to the amount of the supplementary grant the year before—there was a supplementary grant in that year—and, in addition, £600,000 as a additional supplementary grant. The £600,000 was divided among health authorities in such a way as to cushion health authorities who would otherwise have a very high increase in rates.

864. So I would be right in assuming that if costs had stayed the same as they were in 1965-66 they would have been frozen as far as the local authorities were concerned? —Yes.

865. The costs occurring now are costs arising from 1966 onwards and they were met with the help of a supplementary grant of £600,000?—It is more than £600,000. The initial supplementary grant in the year previous to the year we are dealing with was £1.6 million. In the year with which we are dealing the supplementary grant was £1.6 million plus a further £600,000, that is on top of the statutory 50 per cent of the increased expenditure.

866. Deputy P. J. Burke.—On subhead 1. —Grants to Voluntary Agencies—would you have many of them?—They are in two classes. One class of grant is given to boarding-out agencies and the other to institutions. There are two boarding-out agencies which between them got £3,641 in the year under review. There are five institutions catering for unmarried mothers and their children and these five institutions got grants totalling £18,694. I can give details if the Committee would like to have them.

Deputy P. J. Burke.—That is not necessary. You are doing good work.

867. Deputy Healy.—Under what heading is your contribution to voluntary organisations or semi-voluntary organisations such as the Cork Polio General Aftercare Association which gets considerable amounts of money?—Capital grants given by the State would come from the Hospitals Trust Fund. The revenues for the unkeep of those institutions come from the capitation payments made by the health authorities in respect of people from their areas sent for maintenance. The Exchequer, of course, repays more than 50 per cent of that to the health authorities through subhead G.

So these are covered in subhead G.?— The revenue contributions are covered under subhead G.

And the capital grants?—Through the Hospitals Trust Fund.

868. Chairman.—We have a copy of the Hospitals Trust Fund Accounts.* As I understand it the Fund pays the capital grants for the county councils and subsidises the loss in revenue in our voluntary hospitals?— The deficits of voluntary hospitals and capital grants to local authority hospitals and voluntary hospitals.

869. Deputy Briscoe.—In regard to subhead P.—Fluoridation of Public Water Supplies—are all local authorities now using fluoridation?—At the moment just under 1.2 million people are getting water which has been fluoridated. The total population on public piped water supplies is of the order of 1.5 millions so that there are probably about 300,000 people on public piped water supplies—which are the only supplies you can fluoridate—who have not yet got the benefit of it. They are mainly in the smaller areas. There is a wide variety of supplies and fluoridation cannot be introduced in all of them for technical reasons. However, practically all the larger supplies for cities and towns are now covered.

870. No local authority has refused to fluoridise the water supply?—No.

871. Deputy Healy.—Is it too early to say if there have been any beneficial results from this?—The Irish Dental Association sponsored a survey in County Kildare, the results of which were published recently. They selected two towns, one a control area where the water had not been fluoridated, and the other a town of equal size for which the water supply had been fluoridated. The results vary from age to age but there was an improvement of well over 20 per cent is the dental health of younger children in the town for which the water had been fluoridated although fluoridation commenced only a few years before. We are hoping, however, that the ultimate results will be very much better.

872. Deputy P. J. Burke.—The results for such a short period are very gratifying?— It was the expectation that there would be a very substantial reduction in the incidence of dental caries as a result of fluoridation.

873. On Appropriations-in-Aid perhaps I could inquire if many people have applied for registration of homes for incapacitated people under the recent legislation?—I am afraid that I have not the information here. The Act is administered by health authorities without reference to the Department.

We had experience of some unfortunate homes in the city some years ago?—Quite.

Deputy Healy.—There is some machinery for examining them.

874. Deputy Briscoe.—May I ask a question in regard to polio? I understand that there is liable to be an outbreak of polio this year greater than outbreaks in previous years due to the lack of the correct vaccine? —The Minister when he was introducing his Estimate last night in the Dáil pointed out that we had got quite a good response to the oral polio vaccine scheme which was introduced three or four years ago. We had no case of polio in the following year and two cases in the next year. Unfortunately this year we have had a crop of them, seven so far. Of course, if the vaccination state of the public at large is not kept up, if the percentage vaccinated falls below a certain figure, outbreaks are likely just as in the case of diphtheria.

875. I notice that the explanation on subhead L.—Dissemination of Information on Health and Health Services—says that “It was not necessary to incur expenditure on press advertising and only to a limited extend on television”?—At the moment we are examining what we should do about a publicity campaign to induce people to bring the vaccination state of their children up to the proper standard.

876. Deputy P. J. Burke.—We have found in the health authority that the number of children being vaccinated for diphtheria has been falling in the last few years?— In the last two years the figures for diphtheria immunisation were rather better than they had been in the previous two years. About 67 per cent of the children who should have been vaccinated against diphtheria were done in each of those two years compared with lower than 60 per cent in the two preceding years.

877. We are always having appeals from the health authorities in this regard?— Dublin is particularly bad. There seems to be a tendency not to avail of the facilities which are available and, indeed, which are more readily available to Dublin people than to people in other parts of the country.

878. Deputy Healy.—Going back to Deputy Briscoe’s point about the scarcity of vaccine is the oral vaccine still available? —Yes and every county medical officer is carrying out his schemes for dealing with children not already protected.

879. When we were doing it in Cork we had to take over a whole ballroom. It was one of the most widely used services we ever had.—About 900,000 children under the age of 19 availed themselves of the scheme.

880. Deputy Briscoe.—There are doctors who prefer to give an injection. I know a doctor who does not like the oral vaccine. Is the Department absolutely satisfied that the oral vaccine is quite safe?—We believe that it is completely safe. Of course, we are not the only country to have done it on a mass scale.

881. Deputy P. J. Burke.—Your Department are looking after the diabetics very well, too?—That scheme is working well.

882. I see more improvements are in the offing if we can take press reports as true? —The Working Party which sat in the Department on child health recommend that treatment should be provided free of charge for certain disabling diseases. The Minister said in the Dáil last evening that he intended to make provision for this in the proposed Health Bill recently introduced.

883. Have you had much demand for immunisation against this Asian flu?—No, there is very little demand for it. We have a supply of vaccine which will probably never be used; but it is a form of insurance.

884. Deputy Briscoe.—It will not last very long?—The vaccine for one type of flu may be practically useless for another. That is the trouble. There is no general vaccine against flu.

Deputy Healy.—“Flu” covers a multitude.

885. Chairman.—The statement on net health expenditure which has been circulated gives us last year’s and this year’s expenditure.* As one would expect the cost has gone up.

886. Deputy Healy.—I see the cost for tuberculosis has gone up. There were many appeals made during the year not to neglect immunisation against TB. I suppose that is the reason for the increased cost?—The number of patients is decreasing constantly but the costs of the institutions are still going up.

887. Deputy Briscoe.—How many patients are there at the moment?—There were 1,784 new cases last year as against 1,931 in the previous year but I am afraid I have not got the figure for the number of patients occupying beds. My recollection is that it is of the order of 1,500.

888. Deputy P. J. Burke.—Many of these would be older people?—Yes. When I started going through TB institutions, the vast majority of the patients were in the 18 to 30 age group. Now probably the majority are in the 45 and upwards age group.

889. Deputy Healy.—On the statement of Expenditure on Medicines 1966-67 and 1967-68, † I wonder if anything can be done to control the increasing cost of medicine?

Deputy Briscoe.—There has been some advance there with the stock control system that has been introduced. It will be interesting to see how it works.

Mr. Suttle.—I think that only applies in Dublin.

Mr. Ó Muireadhaigh.—There is a central pharmacy in Limerick, too.

890. Deputy Briscoe.—If we find that there is a saving or a greater efficiency in the handling of drugs as a result of this I suppose it would be the intention to extend it?—We are hoping that under the new legislation drugs will no longer be provided in the present manner in the dispensary service. We are hoping that they will be provided through the retail outlets as in the case of other sections of the community, under terms arranged with the trade. There have been negotiations.

Deputy Healy.—Small profit and a quick turnover.

891. Deputy P. J. Burke.—It is a big question. We found in the health authority that the retail pharmacies were more expensive?—They are more expensive if they have to be bought at retail prices, but if a contract is made with the trade whereby they will handle them on certain terms for the local authority, we believe it will be more economical than continuing the present system.

892. Deputy P. J. Burke.—These modern drugs may be expensive but I wonder if in the long run they are not better for the nation as a whole?

Deputy Briscoe.—If they get people out of bed more quickly.

Chairman.—I do not know how much it is costing us in people off work through illness. I do not know whether the figure has improved over the years or not.

Mr. Ó Muireadhaigh.—We have not that information. I would imagine that the use of more expensive drugs has cut down the period for which a person has to remain off work because of any particular illness.

Deputy Briscoe.—Or occupying a hospital bed?—Yes.

Deputy P. J. Burke.—Take for example a case of pneumonia. Prior to certain drugs coming on the market deaths were very high, going back 25 or 30 years?—And the illness was more protracted than it is now.

Deputy Briscoe.—I do not think this Committee was ever worried about the cost of the drugs so much as about the control.

Deputy P. J. Burke.—I should not like to see the decision being taken from doctors. If a certain drug is able to cure a patient the doctor should be allowed his usual freedom to prescribe it.

893. Chairman.—We come now to the document giving the percentage of population covered by medical cards.*

Deputy P. J. Burke.—I notice that the percentage in my own county is very low?

Mr. Ó Muireadhaigh.—County Dublin is the lowest in the country.

Deputy P. J. Burke.—It is the way I am looking after them.

Deputy Healy.—It is the wealthiest county in Ireland.

894. Deputy P. J. Burke.—The percentage in the city is low also?—The highest is Roscommon, second Longford, third Carlow and fourth Galway.

895. Deputy Briscoe.—What is the population of Roscommon?—Approximately 55,000. Roscommon is regarded as a very poor county. They tell you themselves they are the poorest county in Ireland.

896. These cards are issued on the basis of the person’s income and outgoings?— Quite, although standards vary somewhat from one area to another.

Chairman.—The county manager is the authority in each area.

Deputy Healy.—There could be cards given in specific cases to one of the family where there would be a financial hardship.

Deputy P. J. Burke.—All small farmers have medical cards.

897. Deputy Briscoe.—The medical card is a fairly permanent thing?—It is usually valid for one year.

Deputy Healy.—It is reviewed after one year.

898. Deputy Briscoe.—The national average is 31 per cent—31 per cent of our population are getting a completely free medical service?—For everything.

Deputy P. J. Burke.—That is a very high percentage?—It has been fairly steady all along, between 29 and 32 per cent for the last 15 years or so.

899. Deputy Briscoe.—Would you have a comparative figure with England where there is a free health scheme but where not everyone avails of it?—I would say that 95 per cent of people in England utilise the general practitioner element in the National Health Service.

Deputy P. J. Burke.—Of course, it is a highly industrialised country and they pay for it themselves.

Deputy Briscoe.—They pay much more than we do.

900. Chairman.—We come now to the statement of Payments by patients towards the cost of Institutional Services.* Dublin is very high on the list. Is it because there are so many voluntary hospitals in Dublin and Cork that the figures for Dublin and Cork are high?—This would be affected by the number of old age pensioners in county homes and in mental hospitals where the excess over a certain figure is taken from the old age pension unless the pensioners have dependants, and paid over to the local authority. That is separate from the normal charge in other cases not exceeding 10/- a day, where people in the middle income group have a short-term stay in hospital.

901. Chairman.—There is one matter which is often raised. It is the retention of social welfare moneys, particularly old age pensions, from persons who go into public authority institutions. In some areas if an old age pensioner goes into a district hospital, £1 a week is kept from him in some places and in other places it is not. It seems odd that a person, for example, who gets a fractured hip and goes into a district hospital is treated as a patient and, if he is a social welfare recipient old age pensioner, he is free. But, if that person goes into a county home, money is retained from him. It is purely accidental which place he may go to; it depends on the doctor. In both cases he gets a type of medical treatment and could not be regarded as just a person getting institutional care?—That is so. There are those marginal cases. If a person goes into a county home type of institution, which would include a district hospital which has become a county home type of institution, for long term care, possibly for the rest of his life, he is left pocket money out of his old age pension and the local authority takes the rest. If, however, he is likely to go out into the community again, he has certain continuing commitments outside—perhaps in relation to renting a cottage or a room which he has— and it is reasonable that no contribution should be taken from him.

902. Chairman.—It is a matter then for the local authority to decide which district hospital they will treat as functioning as a county home?—Yes.

903. There is no uniformity of practice?— No, there is not. There could be two patients in the one district hospital; one might be treated as a section 15 case, that is, as being in by reason of acute illness and therefore not liable to any charge, and the other as being a shelter and maintenance case in which event he would have to surrender a part of his old age pension. I think, Mr. Chairman, you had a Parliamentary Question on that.

Yes?—Somebody in Lismore?

That is right. It causes embarrassment to the public representative because he cannot explain it to the patient?—It is hard for anybody to explain it, but I think you can see the theory behind it.

904. Deputy Briscoe.—Recently I had to make representations to the Dublin Health Authority in the case of patients in the Royal Hospital, Donnybrook, where they go in to stay virtually until they die and where they are left with only £1 a week pocket money. This has been the case for a number of years in spite of the increase in old age pensions. This has been retained by the Dublin Health Authority rather than given to the patient, and they are still on that £1 per week, so the pocket money has been going down and down with the devaluation of money. This would be purely a local decision?—Under the regulations the Health Authority is obliged to leave so much with the pensioner. They may take only money in excess of that figure. It was £1, but whether it has been increased over the years I cannot say.

Apparently not?—It is a statutory minimum which must be left to the patient.

905. Chairman.—I think they were allowed formerly to keep 10/- and now it is £1. The point I am making is that in my own area of South Tipperary, if an old age pensioner goes into the district hospital he is allowed to keep his pension, but if he is treated in the county home he is allowed to keep only £1?—The theory is that anyone entering hospital with an acute illness, who will be going out into the community again shortly, is allowed to keep his old age pension while he is in hospital to enable him to meet his commitments outside for rent or rates or perhaps to keep up payments on a television set he has. However, if the person goes into the county home for good, that is a different matter.

Chairman.—Some of them come out again.

Deputy Briscoe.—Some of them go in only temporarily because there is no room.

906. Chairman.—No, they are there as patients?—They are long-term patients.

It just happens that if they are near the county home the doctor sends them in there?—For medical treatment?

907. Yes. An elderly person could have a touch of bronchitis and be in there for three or four weeks and if he happens to be sent into the county home his old age pension is kept except for the £1?—That is inconsistent.

908. It is hard to explain?—I shall discuss that with the manager the next time he is in town. In St. Kevin’s Hospital, Dublin, which is an acute hospital and a county home type of hospital at the same time, the system, as I remember it—I may not have it correct in detail—is that for the first eight weeks a person is in there he is treated as a section 15 case and if he is an old age pensioner he is charged nothing. But after eight weeks he is treated as a county home patient.

Deputy Briscoe.—And deductions are then made?—Yes.

Deputy P. J. Burke.—It is the same with the other institutions, including the psychiatric hospitals.

909. Deputy Briscoe.—There is a statutory figure of £1 with which the patient must be left. It would be a matter of putting down a Question to have that increased. Maybe it is being considered. When was the £1 level decided upon?—About three years ago. Perhaps I could send you a note about it.

Chairman.—Yes.*

910. Deputy P. J. Burke.—Farms attached to hospitals have been cut down very much?—In certain areas, very much. Dublin, of course, heads the list in that respect.

Are the other institutions throughout the country holding on to their land as well? —Rather more of them are holding on to it than we would like. The farm has ceased to have the same therapeutic value as it had in the old days because patient labour has been replaced very largely by mechanisation.

911. Chairman.—Members have been circulated with statements in relation to costs of Lay Administration of the Health Services† and to Minor Receipts of Health Authorities.‡

VOTE 49—CENTRAL MENTAL HOSPITAL.

Mr. P. S. Ó Muireadhaigh again called.

No question.

The witness withdrew.

The Committee adjourned.

* See Appendix 26.

* See Appendix 27.

* See Appendix 28.

† See Appendix 29.

* See Appendix 30.

* See Appendix 31.

* See Appendix 32.

† See Appendix 33.

‡ See Appendix 34.