Committee Reports > List of Committees > Dáil > 1983 > Committee of Public Accounts > Interim and Final Report - Appropriation Accounts 1978 - 1979

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Déardaoin, 19 Márta, 1981

Thursday, 19th March, 1981

The Committee met at 11.15 a.m.

Members Present:

DEPUTY TIMMINS in the Chair 

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 3—DEPARTMENT OF THE TAOISEACH

Dr. N. Whelan called and examined.

69. Chairman.—On Subhead D, page 6—Information and Public Relations Services—there was an original estimate of £6,000 and a supplementary estimate of £85,000 under this heading. What is the reason for such a large supplementary estimate and how was the money spent?

—The estimate was required for publicity in connection with the referenda on the sixth and seventh amendments to the Constitution. This was agreed on the inter-party basis. The money was spent on advertising and general publicity relating to the referenda held in 1979 on the changing of the Constitution.

70. Deputy N. Andrews.—Is that attached to the Government Services or is it funded through the Government Services?

—It was an operation which the Government Information Service carried out on behalf of the Government in 1979. It was a once-off venture.

I appreciate that, but should it not have been accounted for in the Government Information Services rather than here?

—In the appropriation accounts, subhead D covers information and public relations services generally. So this is the correct subhead for this expenditure.

71. Deputy Horgan.—The staff component of the GIS would presumably be under Subhead A.—Salaries, Wages and Allowances—and any non-staff expenditure would be under subhead D.

—That is correct.

72. In relation to Subhead E.—Pearse Commemoration Projects—is there any indication of the reason for the underspending of £5,310?

—Yes. The expenditure in 1979 was less than anticipated. The reason for the expenditure was the commissioning of a film on the life of Pearse together with various musical works appropriate to Pearse. The contracts were placed but the film was not finished and all bills were not received in time for payment during 1979 so bills are being paid in the next year, although the work was commissioned in 1979.

73. Chairman.—What projects were covered under subhead E and how was the amount determined for each project?

—The projects mainly are the commissioning of a film and various musical works relating to Pearse. The range of activities was determined by the Government who decided that this was a fitting commemorative programme. The projects were subsequently initiated on the basis of advice from experts in the relevant fields. The money was spent on the basis of the “going rate” for each project. As I mentioned to Deputy Horgan, the underspending occurred because expenditure was less than anticipated. Some of the works were not finalised and in others final bills were not received in time for payment during 1979. These were paid, however, in 1980.

74. Deputy Horgan.—In relation to subhead B.—Travelling and Incidental Expenses—is it normal for a supplementary estimate to almost double the original estimate? This subhead implies a miscalculation of the initial projection for expenditure which is of a fairly substantial nature, even though it was not all spent in the final analysis. What happened to increase this expenditure? Also, in relation to post office services, how is the expenditure calculated? This, presumably, would be the same for all Departments. Is this expenditure for which they receive a bill from the Department of Posts and Telegraphs, or is it a self-regulating process? Does the Department make their own calculation?

—On the question about travelling and incidental expenses, that subhead covers a number of things. For instance it includes travelling and incidental expenses, training, office equipment and advertising. In this particular year, it also includes some gifts which were presented by the Taoiseach to various people. I shall give details of these gifts if the Committee wish. As to the underspending, this results from the non-receipt, at the end of 1979, of accounts relating to the Taoiseach’s visit to the United States in November 1979. These accounts were not received until end-December 1979 or January 1980. Consequently, they would be paid in 1980. Regarding the first part of the Deputy’s question, the increase in expenditure and resulting supplementary estimate was due to the gifts provided on the occasion of the visits of Pope John Paul II, Chancellor Helmut Schmidt and other people to Ireland. On Subhead C.—Post Office Services— firstly the amount expended was less than granted because of a delay in receiving the telephone accounts from the Department of Posts and Telegraphs. This was due to the Posts and Telegraphs dispute which took place during 1979. With reference to the accuracy of the profile of expenditure at the beginning of the year, this depends on a number of things—past years’ experience plus a projection of increased costs, plus perhaps, increased usage.

75. Deputy Filgate.—On subhead B, some of the gifts mentioned were in September 1979. Would it not be possible to give an accurate estimate of their cost, even though the invoice might not be received until the end of the year, or the following January?

—There are a number of points here. It is not just the gifts themselves which led to the deviation between what is forecast and what is expended. One cannot, for instance, at the beginning of the year, forecast accurately what travelling the Taoiseach will do during the year. Certain circumstances may arise during the year when the Taoiseach has to travel for various reasons outside the country. This subhead therefore contains an element for contingencies.

In relation to 1979, any ordinary person would have a fair insight into what might have happened, but roughly what proportion of this expenditure was absorbed by the presents you mentioned—10 per cent, 20 per cent, 30 per cent?

Deputy Belton.—It was £7,716.

—It is overleaf, on top of the page.

VOTE 5—AN CHOMHAIRLE EALAÍON

Dr. N. Whelan further examined.

76. Chairman.—Have the Government any control over the amounts spent by the recipients on administration or expenditure on actual promotion?

—I will give the background. This is a Grant-in-Aid. It relates to salaries, administrative overheads and promotional costs of the Arts Council. Once the level of Grant-in-Aid for a particular year is decided by the Government the Council can expend this at their discretion during the year in question. Arts promotion covers a very wide area, including, for instance, the following —sculpture, painting, music, architecture, drama, cinema, literature, design in industry, fine arts and applied arts. The Council are independent in their day to day operations.

77. Do the Comhairle monitor grant schemes from other sources, say county councils, corporations or other such public bodies.

—They do not monitor. They have an interest in ensuring that the arts are catered for adequately. They would have an influential say rather than a direct statutory monitoring responsibility.

VOTE 21—ECONOMIC PLANNING AND DEVELOPMENT

Dr. N. Whelan further examined.

78. Deputy N. Andrews.—On subhead A.2.—Consultancy Services—the Department is no longer in existence. What were the consultancy services and what use was made of them?

—The purpose of this subhead was to commission various studies which would be relevant to and have a bearing on Government economic policy. The range of studies commissioned under this subhead dealt mainly with economic and social policies—forecasting general economic output and its distribution, forecasting the output in industry and agriculture, analysing population growth and distribution, housing requirements, etc. I can give you a list of the specific projects if you wish—there are about 40 in all for 1979. As to the use to which they are put, reports were commissioned from groups of consultants. When the reports of the findings or evaluations of these people were received, they were discussed within the Department of Economic Planning and Development and other relevant Departments. The Minister for Economic Planning and Development at that time would take the reports’ recommendations into account in the formulation of economic or social policy on behalf of the Government. Each report received was examined in the formulation of policies in 1979.

79. What action resulted, if any? Were they just theoretical papers placed before the Minister at the time, passed around to the various Department heads—what value did the taxpayers get for that money?

—First, the studies were not theoretical, though there was an element of theory in some of them. They related mainly to the practical problems facing the economy in 1978-79 and up to 1980, 1981 and 1982. The reports were taken very seriously by all concerned. As to whether they brought physical changes in policy, the problem here is to trace whether any individual report influenced for instance the thinking and the legislation of the Oireachtas. It is too soon to say. All one can say is that every effort was made to ensure that points in the reports were taken into account by those concerned.

80. Deputy N. Andrews.—I assume that some of the reports which were sent to you by the consultants are still available in the Department of Finance?

—Yes. The reports and the recommendations in them did not end in 1979. They were also relevant to 1980 and beyond. They are available, not only in the Department of Finance but also in other relevant Departments.

Are they still being drawn upon?

—Yes, many of them are.

81. Chairman.—Again on subhead A.2.— Consultancy Services—what was the delay?

—In the early part of the year we drew up a list of projects which we wished to have undertaken. But the timing of the projects is subject to the availability of consultants. Some consultants are not available when we want them. Other consultants may have given a time limit of say, six or seven months to do a study. For various reasons it may have overrun this time and not be completed until the end of the year. Then the bill would not be presented until the following year. These are the general circumstances which led to the amount of £106,000 not being fully expended.

82. Deputy Filgate.—On Subhead D.—Economic and Social Research Institute—the original sum is £583,000. Why was this supplementary sum of £43,000 necessary?

—There are three basic reasons. There were pay costs under the 1979 National Understanding which were not foreseen when the Estimate was drawn up in 1978; there was an increase in social welfare contributions for the new pay related social welfare scheme, and the Devlin award for the higher grades in the ESRI could not be anticipated. These three matters led to the need for a Supplementary Estimate.

That was the exact sum spent—it was neither over nor under that amount?

—This is a Grant-in-Aid in accounting terms, the specific grant is voted and expended.

83. On Subhead H.—International Organisatins—original £477,000, less Supplementary £92,990—what does this embrace?

—This relates to Ireland’s membership of the European Space Agency. The expenditure results from such matters as the following. The basic subscription to the ESA is £100,000. The arrears from our membership for 1978 was £19,930. We did not pay our full membership during 1978 because the ESA were slow in invoicing us for it. Ireland also participates in a number of programmes which are carried out by the ESA. There is for instance, the Space Shuttle Programme, which accounted for £58,000. We are a member, under the ESA, of the European Mollecular Conference which goes on continuously and which accounted for £8,000 in 1979. This is the nature of the expenditure under subhead H.

What do we get from that expenditure?

—If you wish I will go into that.

Yes.

—There are three main areas from which Ireland benefits. This of course is the main purpose of our being a member of ESA. There is a spinoff of computer and satellite technology to various businesses here and, specifically, to the universities. There is the possibility of getting contracts. Members of the ESA can bid for contracts which come about under the European Space Programme. To date—although I think it will become more competitive—we have done well out of this. In 1978 our payment to the agency was £314,016 and we got contracts from our membership of the agency of £1.3 million. In 1979, the year under review, our total payments to the agency were £508,306 and we got contracts of, approximately, £1.5 million. The figures for 1980 are of the same magnitude.

84. Chairman.—Have the European Space Agency any installations in this country?

—Yes. In 1977 Dublin was chosen as the site for a ground station to monitor the performance of the Orbital Test Satellite—Telecomsat. The station is located in Telephone House, the Engineering Headquarters of the Department of Posts and Telegraphs. Its installation was funded by the ESA.

85. Chairman.—On Subhead F.1.—Payment to Special Regional Development Fund (Grant-in-Aid), how are the projects selected? Is there any danger of overlapping or duplication with other agencies, such as the IDA?

—To give a comprehensive reply, I will refer to Subhead E—Grants for County Development Work. The grants for county development work refer to travelling and subsistence costs, which the officers incur. Subhead F.I. the Special Regional Development Fund, was created in 1967 and is concerned with promoting small development projects, mainly in the western counties, which would, perhaps, be too small for big agencies like the IDA to be involved in and might slip through the net if they were totally in the hands of the bigger agencies. Consequently, there is no overlap. The operation of the fund is undertaken, firstly, through a Central Development Committee which meets in Dublin under the chairmanship now of an officer of the Department of Finance. In 1979 it was under the aegis of the Department of Economic Planning and Development. This Committee receives recommendations for various projects from the 13 county development teams which are located throughout the country. It is a mechanism for enabling local initiative and enterprise to be tapped and for the institutions of Government to be receptive to any proposals that are there and to channel them to the centre for examination and for grants. I do not think there is any danger of an overlap because, for example, the IDA regional officers are members of the county development teams. There is also an IDA presence in the Central Development Committee. In working out the procedures for this, the organisation was designed to ensure that overlapping would not occur.

86. Deputy Belton.—On Subhead L.—payment to Dublin Inner City Group Fund of a Supplementary Estimate of £1,000,000—are there any conditions or regulations governing how this Grant-in-Aid is spent?

—In late 1978 the Government decided to develop a programme for inner city development in Dublin to counteract the inner city social, cultural and economic problems. A working party was set up. It produced a report which led to the creation of an inner city group to examine how the inner city might be developed. In 1979. the Government decided that funds should be devoted to Dublin inner city development. They set up the Inner City Development Fund, to evaluate and appraise projects which would be relevant to inner city development. The inner city group had a lot of contact with Dublin Corporation, local citizen groups and so on, to see what projects were desirable. They had a set of criteria which were designed to ensure that the projects which were chosen reflected a number of needs—economic, employment, cultural, social and educational—within the inner city. Consequently, the money that was expended tended to reflect those things. The projects were discussed with a wide range of inner city interests and of course the group itself contained inner city interests. When the Department of Economic Planning and Development was abolished at the end of 1979 the inner city group activities were transferred to the Department of the Environment.

87. Chairman.—Is that why so little money was spent on it?

—On subhead L.—Payment to Dublin Inner City Group Fund—the grant is £1 million and this was allocated to the Fund. During 1979, £67,000 was spent from the Fund. Many of the projects had to do with the physical development of the inner city. For example, part of the reason for the delay in mounting the projects had to do with land acquisition which can be a long process. For instance, the IDA were very heavily involved, at the request of the Inner City Group, in acquiring advance sites for industries, small factories, small dwellings and so on in the inner city. That was mainly the reason for the slowness of the projects to get off the ground. Of course the £1 million is still being drawn from at present.

88. Deputy Belton.—Are there plenty of funds available for the establishment of those small industries? There have been conflicting reports at meetings that I attended. Some people said that there would be no trouble in getting those factories and others said that they would not get them, that no money was available.

—In 1979 the public finances were pretty stringent and demands upon them exceeded supply. £1 million would not go very far when you are including parks, recreation facilities, schooling and housing.

In the inner city on the north side there is practically no employment and there has been a lot of agitation in looking for factories and small sites. At a recent meeting we heard that there was no money whatever available. We heard also that nothing would stand in their way if a suitable site was obtained. I do not know what to believe.

89. Deputy Filgate.—On subhead J.—Muintir na Tíre—is this Grant-in-Aid paid directly to Muintir na Tíre?

—Yes. Muintir na Tíre are a community development organisation and the Department of Economic Planning and Development was at that stage shaping up as a central Department concerned with, amongst other things, community development and the decision was taken by the Government to transfer Muintir na Tíre into that Department. With the abolition of the Department responsibility for Muintir na Tíre was transferred elsewhere.

90. In that relation do we have any feed-back as to how exactly the money is spent, or is it necessary to have that?

—Yes, the grant is monitored in general terms.

91. Is the Department satisfied enough to make a Grant-in-Aid and depend upon the Muintir na Tíre Council to pay the money out as they see right?

—Not fully. With the Grant-in-Aid the Council or body once they get the grant have reasonable freedom to do what they wish with the grant in accordance with their constitution, terms of reference, articles of association or whatever may exist. However, accountability, vetting or monitoring would occur at the end of one year and before another grant is given. For example, in 1979 when this grant was agreed there would have been discussion with Muintir na Tíre about what happened during 1978, the amount of the Grant they had then, what broad purpose they used it for and whether it was useful and so on before any commitment was given for 1979.

Chairman.—Thank you very much for your help and assistance.

The witness withdrew.

VOTE 44—TOURISM AND TRANSPORT

Mr. N. McMahon called and examined.

92. Chairman.—Mr. McMahon, you are welcome. There is no report from the Comptroller and Auditor General and we will go ahead with the Vote. Under subhead A.2—Consultancy Services—there was an original estimate of £6,000 and a supplementary estimate of £74,000. What were the consultancy services and why was it necessary to provide such a large supplementary estimate?

—The original estimate provided for a relatively modest study into the finances of the County Derry and Lough Swilly Railway and the estimate for that was £6,000. In the course of 1979 there was a serious deterioration in the finances of CIE. The actual losses of CIE increased by something approaching 50 per cent in that year due to a variety of circumstances and it was considered necessary to have a fairly fundamental review of both the finances and operations of CIE and that this would best be undertaken by a professional firm of outside consultants. Therefore, a decision was taken in the course of the year to engage an international firm of consultants. This was a development which had not been foreseen in late 1978 when the Estimate was put together. Accordingly, it was necessary to take a supplementary estimate for £74,000 to make provision for the cost of this additional consultancy service which extended on into 1980.

93. Subhead B.2 is for office machinery and supplies. We know that there was an excess here which is explained in part by the cost of the purchase of flexi-time equipment. What flexi-time equipment was purchased and how much did it cost?

—The cost of the additional flexi-time equipment that year was £4,500. This did not account for all the excess. There was some photo-copying equipment which had previously been used on a rental or leasing basis and it was discovered that this was an unnecessarily costly way of proceeding, and during the year it was decided to acquire the equipment outright because this would be more economical. This added to the excess and brought it close to £18,000.

94. What sort of equipment was it?

—It was photo-copying equipment for document reproduction in the headquarters office and also similar equipment in the Meteorological Office.

95. It is flexi-time equipment I was inquiring about.

—This is equipment which enables the staff to record their time of arrival and departure so that a running record is maintained of their duty hours. This is necessary because they are allowed to put in the requisite number of hours on a flexible basis. In other words, they can start at, say, 8 a.m. and finish work at 4 p.m. and in order to provide for proper record keeping for both remuneration purposes and time off it is necessary to have some type of mechanical record. In fact, it is a clocking-in and clocking-out system much the same as is common in industry.

96. On subhead E—Grants for Harbours—what harbours are involved?

—In 1979 three harbours received assistance under this subhead. By far the greater part of the expenditure involved related to the Cork Harbour development scheme which was a major scheme running over a number of years. Out of the total expenditure for that year of £3.637 million, Cork Harbour accounted for £3.612 million. In that year Sligo received £8,000 for dredging purposes and also a sum of £17,500 was allocated for similar dredging operations at Tralee and Fenit.

97. Has any other Department any function in relation to these?

—Other Departments have functions in relation to harbours, but normally not the same harbours. There are a number of harbours which are designated as major fishery harbours and are the responsibility of the Department of Fisheries and Forestry. There are also a number of harbours which are run directly by the Office of Public Works and they would be assisted under different votes. The harbours for which we are responsible are a number of harbours which are scheduled under the Harbours Act of 1946. By and large, they are the major commercial harbours carrying passengers and freight into and out of the country.

98. Deputy Filgate.—Under subhead D.1 —Grants to Córas Iompair Éireann, regarding the original and supplementary amounts, I should like to know, if possible, what the similar figure is expected to be in 1980, or for part of 1980. Is it escalating, as I am sure it is? If so, by how much? Is this a fair question?

—There will be a subsidy paid to CIE from the Department of Transport Vote in 1980 amounting to £70 million. I am not sure if I heard the Deputy fully? Does he need any further information?

No, that is fine, I just wanted a rough idea as to the amount for 1980.

—If I might revert to the subject of my earlier remarks, it is because of this rather steep escalation in the cost that the engagement of consultancy services was put under subhead D.1.

99. Chairman.—On page 154, under the heading of State Airports, the operational losses on Shannon Airport in 1978 was £1.85 million and for 1979 was over £3 million. Would the accounting officer like to comment on this?

—Firstly, may I say that the actual administration and operation of the airport is entrusted by the Minister to Aer Rianta. In saying that, I do not mean to absolve the Minister, the Department or myself of the responsibility but that is the factual situation. We have been very concerned about the poor financial performance of many of the operations at Shannon Airport. This arises from a number of circumstances. Firstly, traffic has not been as buoyant as it has been in earlier times. There have been changes in the general structure of transatlantic traffic. There has been an increase in the number of scheduled services at the expense of chartered services. These scheduled services tend to go directly into the major gateways such as London, Frankfurt, Brussels and so on. The chartered services which customarily landed at Shannon Airport for technical reasons, such as refuelling, and which also benefited the income, due to landing fees and shopping by the passengers, have tended to fall off in recent years as the scheduled factor increased. That is one development. The general recession in international travel has also affected the traffic through Shannon Airport. In addition to that, we have been a little concerned about the level of productivity which has emerged from studies which we, as a Department, have conducted into the operations at Shannon Airport. It is somewhat difficult to operate a 24 hour airport with rather peaky arrival times and, nevertheless, keep to a minimum staffing structure. There are situations in which the staff are not fully occupied during certain times of the day and certain times of the year. Nevertheless, a certain staffing structure is necessary if the airport is to discharge its national responsibilities as a major international gateway on a 24 hour basis. We have asked Aer Rianta quite recently, as a result of a special survey which we conducted in conjunction with other Departments, to have a look at the total operations of Shannon Airport staffing arrangements and the general productivity level which has emerged, with a view to securing some improvement in the financial performance. I should say that Aer Rianta, in addition to that, are also engaged in a major promotional campaign to attract additional traffic to Shannon Airport. The Committee are probably aware that the fuel farm which has been provided for eastern bloc aircraft would be one example of that type of programme.

100. Chairman.—Do the same considerations apply to Cork Airport?

—They do, yes, in the sense of efforts to secure cost effectiveness in the provision of services and to enlarge the volume of traffic to the Airport. There is a special committee at Cork embracing both these State agencies, Aer Rianta and Aer Lingus and the regional tourism authority, plus local business interests, who have been concerned to increase the volume of traffic through Cork Airport. Traffic in Cork has been reasonably satisfactory and has reached a level above what was forecast originally for an airport of its size.

101. Chairman.—Subhead O. refers to Investment Grants for Ships. What does this represent?

—These refer to residual payments on a grants scheme terminated a number of years ago. Shipping is a highly competitive business and one of our major competitors are the British shipping companies. At a time when the British Government introduced grants to assist their shipping companies, our shipping interests made representations for equal treatment from the Government. A grants scheme was introduced to counterbalance the considerably added advantage enjoyed by British shipping which was receiving grants from the British Government. The scheme lasted for a limited number of years and new grants are not now being made. While the scheme was in operation it was arranged that some of the grants would not be as a single payment but as instalments during periods of from eight to ten years. These will disappear shortly from the Vote because we are near the end of our commitment in that respect.

The witness withdrew.

VOTE 28—CHARITABLE DONATIONS AND BEQUESTS

Mrs. A. Doris called and examined.

102. Chairman.—Have you experienced any legal or administrative difficulties in carrying out your functions?

—None at all.

103. Deputy N. Andrews.—How many staff are included?

—Twelve.

104. Subhead A. deals with salaries, wages and allowances. What are the allowances?

—We have a clerk in charge of accounts, which is an unusual post. The person is an executive officer with an allowance. It is an old-fashioned post but it still exists in our office.

What allowance did he get in this year? Is he a staff member?

—It is a she. She is a staff member. She gets a small allowance. She has to audit accounts for various charitable organisations.

105. What type of charitable organisations do you deal with?

—A whole range. In the main our everyday work concerns appointing trustees and selling trust properties for convents and religious orders in general. We deal mainly with bequests, which is the main function of the commissioners.

106. Chairman.—How do donations and bequests come to the notice of the commissioners?

—Usually somebody sends us in a bequest and asks the commissioners to take over administration of the bequest. Otherwise, any application to the commissioners is purely a matter for trustees. The 1961 Act, under which the commissioners operate, is an enabling Act which enables the commissioners to assist trustees, but the commissioners do not go out to ask for work. The trustees must come to them.

107. Deputy Filgate.—In relation to bequests of charitable donations, do you try to ensure that the intentions of the testators in this respect are carried out?

—We endeavour to do so, provided we are informed of the bequests in the first place.

108. Is there much demand on that particular aspect of your services?

—Yes, that is quite a large part of our services in that there is a duty on executors to inform the commissioners when there are charitable bequests in a will. They must ask the commissioners to exempt them from publication of the bequest. That is usually how they arise.

109. Have you got a follow-up to ensure that if you insist on something being done that it is, in fact, done?

—We have, but the commissioners do not have great powers to ensure that it is done.

110. I am digressing slightly but I have in mind the case of a person who died leaving a sum of money to a priest for Masses to be said. By the time the person died and the will became operative, that man was no longer a priest. In cases like that, you would have a very important function to perform.

—Provided the executor comes to us, we can assist him. There is provision for that, in a case like that the bequest goes to the bishop of the diocese.

111. Deputy Belton.—On subhead B.—Travelling and Incidental Expenses—from the use of the word “incidental”, one would expect it to take up a small amount and that travelling would incur the major expenses. It says that saving was due to the deferment of purchase of stationery.

—Yes.

The purchase of stationery was seemingly more important than travelling expenses?

—We do not go anywhere. In connection with the incidental expenses relating to stationery, in the previous year, 1978, provision was made to buy a computer for the commissioner’s office. It was envisaged that we would need an entire new set of books and accounts to facilitate this computer. In the 1979 Vote it was taken out but we had already made provision for the stationery so we just handed the money back.

The witness withdrew.

MINUTE OF THE MINISTER FOR FINANCE ON THE COMMITTEE’S REPORT (Paragraphs 55, 56 & 57) ON THE APPROPRIATION ACCOUNTS, 1978

Mr. J. C. Holloway called and examined.

112. Chairman.—We will take the minute of the Minister for Finance, paragraph 55, Export Guarantees. We would like to know if any progress has been made in the discussions regarding the rescheduling arrangements?

—They are still in progress. We are hopeful of a successful outcome but, at the moment, it is unfinished business.

113. Deputy N. Andrews.—What type of discussions are going on?

—It is about the period of grace which we may give them and the end period by which the final payments would be made. They are the two basic elements. We expect that what we settle on will be influenced, to some degree, by what the larger countries agree on. We really cannot make the running exclusively in that area on our own.

114. Is there somebody in your Department dealing specifically with those discussions?

—Yes.

How frequently do they meet?

—I am afraid I cannot answer that. Our first meeting was scheduled to take place in Dublin in February.

Anyway someone is dealing with it and you hope to have it resolved very shortly?

—We hope so. It is under the management of the Department of Foreign Affairs because it is regarded as business with a foreign country.

115. If we are back here next year, will you have an answer for us?

—I hope we will have the right answer.

116. Chairman.—On paragraph 56, has any decision been made in this case?

—The matter is still being examined and it has not been concluded. I should make it clear that the Department of Finance are quite happy with what was done. It is a case of whether it should have been put up for sanction at the time. This is still not concluded.

117. Paragraph 57 refers to Kilkenny Design Workshops. Are Kilkenny Design Workshops now satisfied that they are getting realistic fees as far as they are concerned?

—I would say that they have pushed it probably as far as they can go for the moment. The Committee probably are aware that we supplied to the Department of Finance details of the hourly rates charged by Kilkenny Design Workshops over the last seven or eight years and they have given a summary of that in their minute indicating that the fees have gone up by 166 per cent. 114 per cent and so on since 1978. Perhaps the best thing that I can say is that as far as all the State-sponsored bodies within our domain are concerned we have made it clear to them that we want them to maximise their income, and there have been quite significant improvements in that respect over the last four or five years. especially in the larger organisations like the IIRS.

118. Deputy N. Andrews.—Kilkenny Design Workshops are trading. Is there anybody in the Department who monitors the activities of Kilkenny Design Workshops?

—There is monitoring in a general way. They are not a large organisation and the people who would be responsible for them in the Department really look after foreign trade as a whole, including Córas Tráchtála, the export credit scheme and so on, and one can imagine that the amount of time they would have for Kilkenny Design Workshops would be fairily limited. However, they keep a general watch on them to see how they are getting on, but it is very hard to measure the value of the thing in terms of their benefit to the national economy. We have to rely largely on the origins of this thing because a very thorough investigation was carried out by some Scandinavian experts who in the most dramatic terms indicated that there was a serious lack of national competence in that area and that something ought to be done about it. I think that those people having a knowledge of it would feel that it is a useful expenditure.

I agree, but my anxiety is that we would not interfere too much and I am glad to hear that it is only in a general way that the Department monitor their activities. They are an extremely useful organisation in the area of design. They may be in some ways lacking in support but they are an extremely useful organisation and a great asset to the country. As far as the Scandinavian report has gone, I think that they have not extended and expanded enough. I am glad to hear what the witness has said, that not too much pressure is put on them. I am anxious to see the semi-State groups and groups who receive grants from us make profits. In this case we have an obligation to support them.

—There are other people who feel that the activities of Kilkenny Design Workshops should be expanded quite considerably.

I agree fully with that.

VOTE 43—INDUSTRY, COMMERCE AND ENERGY

Mr. J. C. Holloway further examined

119. Chairman.—Paragraph 44 of the report of the Comptroller and Auditor General reads:

“Subhead DD.—State Support for Avoca Mines Ltd.

The charge to the subhead represents loans made to Avoca Mines Ltd. to enable the company to repay bank and other borrowings (£3,285,332), to purchase capital equipment (£415,714) and to provide it with working capital (£316,328). The loan is secured by a charge over all the assets of the company and is repayable with interest over a period of four years, the initial repayment instalment being due on 31 December, 1980.”

Mr. MacGearailt.—State support, in the form of loans totalling £4.017 million, was made available for Avoca Mines Limited from this Vote in 1979. Paragraph 44 indicates the purposes of the loans and the general conditions attaching to them. Further provision for support for this company was made in the Vote for Energy in 1980.

Chairman.—Has the initial repayment of the instalment due on 31 December 1980 been paid?

—Unfortunately, this is the business of another Department now, so I am afraid that I could not answer that specifically. All I know is that in general terms the affairs of that enterprise are getting worse rather than better and I would not expect to see that loan ever being repaid.

120. Deputy Belton.—Is there any connection between Avoca Mines and NET, for instance?

—There is. NET buy pyrites from them for the manufacture of sulphuric acid, but that would not be a major thing in the affairs of NET.

121. Deputy N. Andrews.—Could you explain very briefly public service pensions, subhead A.2?

—These are the pensions of a former chairman and member of the Fair Trades Commission.

122. Subhead A.3. is for consultancy services. Could you give us a run-down on the expenditure there and the value the taxpayer may have received for the consultancy service paid for?

—It covers quite a range of projects which we have undertaken. including consultancy exercises by the Prices Commission. The total expenditure by the Prices Commission was £104,000 out of the total. If I may give some examples, would that satisfy the Committee?

Please do.

—The review of the town gas industry, metrication. insurance industry control, the problem about the waxing of oil in cold weather, the registry of friendly societies and the investigation of certain societies dealing with money and certain reports of Nitrigin Éireann. These are the main ones.

123. Chairman.—On subhead E.—Minerals Development—in the general climate of exploration why was so little provided, £17,000, and so little spent, £1,333?

—The GSO, in fact, did not really become involved in exploration activities except to a very minor extent. Their function is to carry out general mapping activities, to supervise the activities of people who hold prospecting licences, to correlate the returns which are sent in and generally to deal with the accumulation of geological data in the country. There are occasions when we ask them to become involved in a limited way in certain things, as, for instance, in the North Clare phosphate study which we wanted them to undertake. There was in that year £10,000 actually provided in connection with that exercise, but the work was not in fact carried out because it became fairly clear that this deposit does not look at all commercial. That was the main item there. There were a couple of other items: for example, a marble deposit which was discovered by the GSO more or less accidentally some years ago and we were thinking of spending some more money through the GSO on the further delineation of that deposit, something in the order of £5,000. That did not come about because it was not the right time to do it. That would account for most of the £15,000 which has been saved.

124. Also under subhead E, the estimate provides for compensation. What is this compensation and who gets it?

—These are minerals acquisition orders which were made over quite a long period of time. None of these orders has been made in recent years for legal reasons but in the past, in the exercise of powers given to him under the Minerals Development Act, acquisition orders were made by the Minister for Industry and Commerce and compensation payments for the people whose minerals had been compulsorily acquired were settled by the Mining Board. These compensation payments would go under this heading. They were fairly small dimensions because they were fixed a long time ago.

125. Under subhead K.2.—Credit Financing of Certain Capital Goods Exports—what kind of goods are involved and how does this scheme work?

—Basically, the goods involved here are capital goods that one would expect to have paid for over a period perhaps of five years. Nobody has ever defined precisely what capital goods are. Generally speaking, they are a category of goods where the rate of interest is quite significant because of the time period involved and if you have to compete in the sales of capital goods abroad you inevitably come up against other countries, particularly France and the United States. which have facilities for providing cheap finance for the export of capital goods. In effect, this is a subsidy by the State to cover the difference—an average figure works out at around 8 per cent—between that and the rate which they would pay commercially for the funds. The burden is not borne exclusively by the State, the banks are burdened in about the same dimension each year out of their own funds. That arrangement with the banks came to an end last October but we are discussing with them at the moment a new arrangement to have the same effect. Those discussions are going quite satisfactorily. There should be no mistake about it; this is a subsidy for the export of capital goods.

126. Deputy Filgate.—Could we have a breakdown on subhead G.—International Organisations etc? The amount spent was £327,317. What does this represent?

—It covers a tremendous array of organisations which we have joined over the last 60 years. Recently the list has been added to, not by any choice of our own, but because we must, arising out of our membership of the EEC. In some of these areas we have no longer any option and there are organisations like international tin, rubber, coffee, and a few others which we now must join whether we like it or not. In the negotiations, either in Brussels amongst the member countries of the EEC or in Geneva where the thing is dealt with on a United Nations basis, the prime function of our delegates to all these meetings in the negotiations leading up to the conclusion of these international agreements is to minimise our contributions to the funds of the organisation. I must give the delegates full marks because they have been very successful in changing the rules quite dramatically in many cases and in reducing our contribution to the smallest dimension that we can get away with. I could, if the Committee wish, send a rather detailed piece of paper on which these bodies are listed but I do not think it would make very exciting reading. It covers things like patents, weights and measures, the coal and steel community and that kind of thing and more recently the commodities which I have mentioned.

127. May I take it that under subhead D.—Geological Survey—on page 139 that the wages element in this is already covered at subhead A.1. or does this figure include all?

—No, the wages of the people in the GSO would be covered by subhead A.1. The other heading would refer to equipment, projects and things of that kind.

Could we have any idea of what that element would be?

—I do not think that I could put an exact number on it, but the number of people whom we employ there fulltime is about 75. Indeed, it had gone up very dramatically since the early sixties when there were only three or four people there. The accounts we are looking at relate to 75 people and it really is quite a significant burden upon State funds although they are not highly paid, unfortunately. Nonetheless, 75 people is quite a burden. That is why we try to increase the State income arising out of fees which we charge for prospecting licences and things of that kind. We in fact cover the cost quite handsomely.

Is the outcome of their activities available to the general public on payment of fees?

—Not everything has to be paid for. There is a lot of general knowledge which is available, some of it published. There is other material, of course, which is private. This includes the returns on drilling and other exploration activities sent in by people who have prospecting licences. Some of this must be kept secret for a period of five years. Maps are sold and the aeromagnetic survey is covered by this account plus other similar activities like an aerial mapping exercise made some five years ago. The maps from those exercises are publicly available and are charged for. There is quite a reasonable income from it.

128. Chairman.—Subhead M. refers to the Irish Productivity Centre. What are their functions?

—It is a joint activity. They are not a State-sponsored body. They are a joint body of management and trade unions which started many years ago as an offshoot of the Marshall Aid programme. The Americans were providing funds for the rebuilding of Europe. They were worried about European productivity, and each participating country was asked to set up some kind of national centre to promote productivity. If you go far back enough, that is the origin of the IPC. Our main interest is in the Business Advisory Service which the IPC run for small enterprises. By all accounts this is quite effective. It is availed of by people like the IDA. Fóir Teoranta, Córas Tráchtála and the Labour Court when they want to have work carried out in relation to the small business sector. The IPC have other activities, less of a business nature, such as improving relations between management and employees, but our main interest is in the business advisory service. They also charge considerable fees for their services, but because of the overall nature of their business we find it necessary to pay a contribution to them each year.

129. What is the basis for the subsidy in subhead O.1—Shipbuilding?

—The rules have varied during the years. At one stage the subsidy was seven per cent of the contract value of the ship being built. It was agreed among OECD members. At another time it was eight per cent, but as things got worse in the international shipbuilding scene it was increased to 24.5 per cent. There is considerable confusion in that area. It is clear that subsidies even beyond 24.5 per cent are being paid. In our case the support we give to the yard is not totally reflected in the subsidy payments shown here in the Department’s accounts because when the Navy or the Department of Fisheries and Forestry or other agencies order ships from the yard the price is arrived at by negotiation, and the price is a reflection of the economic reality in the yard. In such cases there is no question of the subsidy being identified. You may recall the recent case of Irish Shipping who were adamant that they would have to have made good to them the difference between the price they were paying to the yard and that which they would have paid on the open market. The accounts before us relate to a subsidy on a particular ship. It was a payment on account, the balance to be paid the following year. In that case the amount would have been less than 8 per cent.

130. On subhead O.2—Interest Subsidy to Shipping Finance Corporation Limited—how is that based?

—That is based on an international agreement about the length to which countries should go to provide cheap finance for shipbuilding. The subsidy varies between 8½ per cent and the going rate. It comes to a considerable sum of money. The bigger the gap between the market rate and the level at which we subsidise, the bigger the burden on the State. It is very expensive to be in the shipbuilding business at the moment.

131. Deputy Filgate.—There seems to have been a falling off in grants under subhead L.—Technical Assistance. What is the reason?

—That scheme is being wound down. It has been terminated. Claims coming in now are in respect of projects approved before the scheme was terminated. I expect it will have been finished in a couple of years. It relates to consultancies undertaken by experts.

132. Chairman.—What is the position about Mianraí Teoranta—Subhead S.?

—That is an item which has gone to another Department. The Government were thinking of resuscitating Mianraí Teoranta, which has been moribund since 1956. The idea is there to bring them back to life again and give them a role in hard mineral exploration throughout Ireland. A provisional decision was taken to do this. I know legislation has been prepared.

133. On subhead T.1—the National Film Studios of Ireland Limited—how is that company operating?

—As the accounts show, the situation has not improved. We started with a provision of £150,000 and we had to save them with the aid of a supplementary sum. Their situation has not got any better. There was a full debate in the Oireachtas on the affairs of the film studios when the Minister introduced two Bills in December, one to put the company on a proper statutory basis and the other to set up the Irish Film Board. The effect of the legislation was to provide the share capital structure for the NFSI and to provide the new board with funds which might lead to the creation of more business for the studios. That provided an opportunity for a comprehensive debate on the affairs of NFSI and the legislation was passed by the Houses of the Oireachtas. Subsequently, we availed of the new provisions to provide them with £100,000 share capital which they needed for necessary capital works. It has to be admitted that the future for this enterprise is not bright.

Deputy N. Andrews.—I have spoken about this before. Why do we persist with it when we know it is not working and that it is costing money? What value is the taxpayer getting for his money? I find it incomprehensible, particularly in the light of developments in the film industry.

—The decisions to finance the enterprise are taken by the Government and by the Dáil each year. It is occasionally debated in the Dáil whether it is worthwhile. I am not really in a position to comment on it.

134. I am not asking you to go into policy matters; I understand that is for another forum. As an Accounting Officer, do you see us getting value for money invested in that? It is your responsibility, as Accounting Officer, to be able to tell us whether we are getting value for the taxpayers’ money without going into the area of policy.

—I think it is more correct to say that my function is to see that the money is expended for the purpose for which it was intended.

135. Are you satisfied that is happening?

—I am. As regards the results achieved, I suppose you could say that another of our functions as civil servants is to analyse the business as closely as we can, to get as much information as we can and then put those facts to the Ministers and the Government. We can do no more. I assure you that the thoroughness of the examination which was carried out on these two entities, NFSI and the Irish Film Board, left nothing to be desired. There was considerable interdepartmental debate on it. Of course, there must be very serious question marks about it. If you look back on the history of Ardmore you could say that people were mad to become involved in it, but the film industry has a tremendous attraction for Governments all over the world. There is a feeling that you have not fully arrived unless you have a domestic competence in film making. Many other countries are bearing the burden of a domestic film industry at enormous cost.

—I fully support that we should have a film industry but I do not think Ardmore or the National Film Studios of Ireland are giving value for money. I think you agree with me but you cannot say so. We will leave it at that.

136. Chairman.—On subhead U.—Energy Conservation—we would like to know, in view of the present climate and circumstances, why publicity expenditure was less than anticipated?

—For quite a number of years energy conservation was rather a poor relation. It suddenly became evident to us in 1978 or 1979 that considerable achievements could be made by a properly run energy conservation programme and that it was worth spending money on this. We gave a special role to the IIRS in that area. There were all kinds of things which they were going to embark upon. But it took quite some time for them to start and in that particular year they did not get round to a number of the things which they were hoping to do. That is where the shortfall is. If you look at the accounts for the following year you will find there is a dramatic change.

137. Deputy Filgate.—With regard to subhead V.—Rural Electrification—we still have quite an expenditure in this field. I would like to know, in consideration of the fact that rural electrification is being paid for now very dearly by individuals looking for it, does this money pay for maintenance or capital expenditure or what is it?

—The object is to subsidise the capital cost of connecting people to the rural electrification system. Without the subsidy it would be beyond the reach of people in rural areas. It is really a continuation of something which started in 1945. The purpose of the subsidy is to enable the ESB to do things in the rural electrification area which otherwise they would not be able to do. They are not compensated for all the extra costs. Nonrural electricity consumers, in effect, subsidise to some extent the rural consumer. What is reflected in those accounts is the accumulation of things going back over a long period. The system is that when the ESB carries out works which are over and above what are established as reasonable costs, they are entitled to be reimbursed in part from the Central Fund. The Central Fund has to be recouped the following year by means of an annuity over a 25 year period from the Vote for the Department of Industry, Commerce and Energy. That £2,364,000 is the accumulation of a whole string of annuities that were fixed over the years. That amount has been growing steadily but it has now reached its peak and some of the annuities are being discharged. It will probably start to decline next year or the year after that.

138. I imagine that rural electrification has nearly come to an end. Have you any idea of the percentage still to come, because there are cases in which people in isolated areas, as well as being subsidised by the Exchequer, are also subsidised by the man who has to pay £1,000 to have his house wired and who will, possibly, have to pay £1,500 for one pole?

—It is true that not all of the excess costs of rural electrification are paid for in the subsidy. Some of it is lost in the general account of the ESB. In that way, as you say, some consumers are subsidising others. In the accounts of any individual consumer it would be a very small item. As regards the extremes to which this can go. I do not think you should be too worried about it. We always maintained very close contact with the ESB in regard to this. We are adamant that a fairly well off person who decided to build a holiday cottage on top of Carrauntoohill could not expect to be subsidised. He could not expect to avail of a subsidised service from the ESB. The idea of second homes generally has always been looked upon with a jaundiced eye. Although you cannot be too selective in carrying out rural electrification, we were quite clear that there was a limit to the kind of thing the ESB could be expected to do. I would like to confirm what has been said, that there is very little left in the country to do now. The money that was being used in the accounts that we are speaking of was the last of the advances from a sum of £10 million that we had agreed to under the 1971 Act. The rest of that £10 million was issued prior to 1979. That is the culmination of the thing really and that is why the outgoings should decrease from here on.

139. Have you any idea what it might be for 1980—is that an unfair question?

—I am afraid I have not.

Chairman.—Thank you very much for your help and assistance.

The witness withdrew.

VOTE 36—NATIONAL GALLERY

Mr. H. Potterton called and examined.

140. Chairman.—We would like to welcome you and wish you well in your new post. On subhead D.—Purchase and Repair of Pictures —what pictures do you buy?

—Most of the pictures that are paid for out of the Vote are in fact Irish pictures and sculptures, either portraits for the national portrait collection or Irish paintings. That is mainly what all of this goes on every year.

141. Deputy Filgate.—Do you get pictures on loan that we have to pay for or is there any figure included for such expenditure?

—We never get pictures on loan. We never pay a hire charge for pictures. If we borrow a picture we get it as a loan and that is that.

142. Would we have expenditure for transport?

—Yes, we do.

Where would that be included here?

—That comes under subhead B.

143. Deputy N. Andrews.—I did not notice this until now. Under extra remuneration who got £1,960 for overtime—virtually £2,000?

—The attendants. They work on Thursday nights and Sundays. They have set hours.

Are they putting in overtime on almost a continuous basis?

—Yes.

What would an attendant receive?

—I am afraid I am not absolutely clear on how much they earn, but it is part of their job that they work overtime every week.

The amount of £2,000 seems a very large amount of money to pay one individual whether he be an attendant or a cleaner.

—It is a very large amount of overtime.

For one individual?

—Yes, but they do take it as part of their salary really.

Would it not be better to spread it out or alternatively employ somebody else if you have difficulties there?

—We would have to get the same amount of money, or it would be difficult to employ people just for Sunday and Thursday evening work.

144. This committee have always been very anxious that where possible employment should be given and I think the witness will appreciate the reasons for that.

—Yes, it is just that the gallery is open on Thursday night and Sunday and it would be a matter of cutting that out.

You would not want to do that, but I think £2,000 is a bit heavy.

145. Deputy Filgate.—Under Appropriations in Aid is a note that the increase is due to greater demand for reproductions. Is that reproduction of pictures within the gallery itself?

—Yes, it is black and white photographs of pictures within the gallery sold to students, publishers and people like that.

146. Deputy N. Andrews.—To get back to the overtime matter, I will not delay the committee very much longer on this. You tell us that the attendants consider overtime part of their job specification. Is that right?

—Yes, they are employed to work. They have one day off a week so really they work six days a week.

Six days a week?

—Yes.

147. Why do you not work that into their job specification?

—And pay them a salary rather than overtime?

And pay them a salary rather than £36,000 in overtime.

—Yes, one could try to negotiate and that might be a better idea.

148. If you cannot negotiate is there any way that you could employ more people? The amount of £36,000 would employ some people full-time in there.

—It might be worth investigating the question of paying them a salary which would take into account the full hours they work rather than paying them overtime.

149. Chairman.—Under subhead E.—Conservation of Works of Art (Grant-in-Aid)—what is the distinction between repair and conservation?

—I find this is an anomaly also. Subhead D is really used in terms of the purchase of pictures. No repairs come out of this. There is an inaccuracy in that description. Subhead E is entirely for conservation, which means buying materials. having special photography done and all that kind of thing. I find the description of repair in that subhead confusing.

Deputy Filgate.—Are there any losses by way of theft or damage to property?

—A picture has been lost and its loss has been reported. In fact, the position was further complicated by the fact that it was a picture which did not belong to us but was a Chester Beatty picture. The matter has been reported.

150. In regard to subhead F—Purchase of Books and Journals—what kind of books and journals would be involved? It is a small sum of money.

—These are books and journals for the library which is open to the public. It is the principal Art Library for the country. It is used by teachers and students.

These are books and journals on art, are they?

—Yes, that is correct.

The witness withdrew.

The Committee adjourned.