Committee Reports > List of Committees > Dáil > 1984 > Committee on Public Expenditure > Report - First Annual Progress Report of the Dáil Committee on Public Expenditure

III FIRST ANNUAL PROGRESS REPORT

1. INTRODUCTION

1.1 This is the first Annual Progress Report of the Committee on Public Expenditure as required under paragraph (7) of the terms of reference laid down by the Dáil on 21 June 1983. The Report is in the form of a summary of Committee activities since its establishment.

1.2 The Committee met for the first time on 13 September, 1983. Deputies Michael Keating and Michael O’Kennedy were unanimously elected Chairman and Vice-Chairman respectively. During the remainder of 1983 the Committee met on 19 October, 8 November, 14 and 21 December. At the latter meeting it was agreed to meet each Tuesday at 4 p.m. As a result with the exception of Tuesday, 20 March, when the Dáil was closed, during the Easter Bank Holiday and the month of August the Committee has met each Tuesday and on Friday 14 September 1984 (on 38 occasions up to 25 September, 1984).

1.3 The Committee decided from the outset that it would operate principally on two levels

(i)detailed consideration and evaluation of major policy areas of public expenditure of each Department/Office and non-commercial state-sponsored body insofar as possible, judging such expenditure on rational and consistent criteria

(ii)consideration of specific expenditure items or policies which would be suggested for review, such items could be brought up for inclusion on the agenda at short notice if considered sufficiently urgent by Members.

2. PROGRESS TO DATE

2.1 Report on Recruitment by the Civil Service Commission and the Local Appointments Commission

Following an examination on 8 November, 1983 of the Secretary to the Commissions, Mr Seán De Buitléar, the Committee drew up its First Report which was laid before the Dáil on 7 February, 1984 and subject of a three hour debate on 23 February. The Report highlighted an unacceptable situation whereby costly competitions were being held for thousands of applicants in some cases and the actual number of vacancies filled was in single figures. As a result of the Committee’s recommendations, the Minister for the Public Service, Mr. John Boland T.D., took decisions about cancelling a number of civil service competitions planned for this year as panels of successful applicants were already available from earlier competitions.

2.2 Rental of Office accommodation by the Office of Public Works

The Committee was concerned about suggestions that the Office of Public Works present system of acquisition of accommodation for Government Departments/Offices was inefficient and wasteful of public expenditure. Following the hearing of evidence from the officials of O.P.W. who are directly involved in that area, it became clear that the present system of State property acquisition may not be the most efficient or cost effective and that example may have to be taken from the private sector which, of necessity, is forced by budgetary constraints to be extremely cost conscious.

Because of the importance of this area the Committee has decided to seek independent expert advice to study the present system of property acquisition with a view to identifying the most cost-effective methods available. Following the completion of an in-depth study of the issues involved the Committee should be in a position to report to the Dáil later this year with positive recommendations for an improved and more effective system of rental/purchase of accommodation on behalf of the State.

2.3 Submissions from the Public

The Committee advertised nationally at end January for submissions from the public as a result of which almost 100 submissions have been received. These are at present being considered and will be a source of information in the Committee’s reviews of Departments/Offices and State bodies. Where necessary, it was decided to refer particular issues raised to the relevant Department or organisation.

2.4 Questionnaire

The Committee sent a detailed questionnaire at end January (Appendix A attached) to Secretaries of all Departments/Offices and the Chief Executives of the non-commercial State-sponsored bodies. The replies to these questionnaires will form the basic source document in the Committee’s reviews of the individual bodies. The first detailed examination of the Department of the Public Service began on Tuesday, 17 April. A consultant has been retained to advise the Committee in this examination and it is expected to report to the Dáil in October.

A copy of the Committee’s tentative timetable or work programme attached in Appendix B sets out the Committee’s systematic approach to a comprehensive review of public expenditure over a five year period. The sequence may be changed if it is decided that priority should be given to a particular Department or programme of expenditure.

2.5 Consultants

The Committee decided to employ consultants to advise on specific areas of public expenditure as the need arises. Invitations issued to the relevant organisations with a view to drawing up a panel of experts from which the Committee could draw from time to time as it sees fit.

2.6 Awards Scheme

The Committee agreed in principle to the establishment of an award scheme for third level students for original papers/theses on subjects of relevance to the Committee’s work. The funding of such a scheme is under consideration at the moment. The Committee places great value in involving young people in its work and hopes that this scheme will provide a channel for their participation.

2.8 Second Report

2.8.1 The Committee’s Second Report which was laid before the Dáil is entitled “Proposal to Establish a Centralised State Agency for Persons Registering for Employment or Training”.

2.8.2 Apart from the ongoing review of Departments and agencies, the Committee decided from the outset that specific areas of public expenditure which warranted urgent attention because of actual or potential waste of tax-payers’ money should be dealt with as a matter of priority. It became clear that one such area that required immediate rationalisation was that of the multitude of Government Departments and State Agencies involved in recruitment, training and employment. The Committee felt that there was clearly a need to find out exactly (a) what services are being provided by the various institutions at present (b) what liaison/co-ordination existed between them and (c) to identify avoidable duplication of those services, with a view to eliminating such waste as a matter of urgency. In undertaking that review the Committee was, of course, mindful of the fact that any streamlining of the State services for employment and training should lead to an improvement for the users at a time when people must be provided with the best skills and which are necessary to compete in to-day’s job market.

2.8.3 The Committee took evidence over four separate meetings from the Civil Service Commission, the Department of Education, the Department of Labour, the Department of Social Welfare, An Comhairle Oiliúna, the Youth Employment Agency and the Irish Vocational Association. The Committee would like to record its appreciation for the courteous and cooperative manner in which the many officials involved provided information on which the Report was based.

2.8.4 The Committee confirmed its original fear that there was wide-scale fragmentation, duplication and a lack of co-ordination of services that had led to a waste of public expenditure at a time when there are unprecedented demands on Exchequer resources. From the users’ viewpoint it was quite obvious that the very existence of so many agencies presented a bewildering array of offices, forms and so on which must be changed in the interests of greater cost effectiveness and efficiency.

2.8.5 The Committee’s recommendations reflect some fairly radical changes and improvements that must be made to ensure that the most up-to-date services are available for people who may be seeking training and employment. While there is some emphasis in the Report on school leavers and those under 25 years of age who experience particular problems, the Committee recognises that those in the older age groups must also be catered for by the National Manpower Service, AnCO and other agencies.

2.8.6 To summarise - the Committee recommended:

3. ADVISORY COMMISSION

The Committee has been considering the question of establishing contact with a voluntary group of people in the private sector who would be willing to give the benefit of their views and expertise on aspects of public expenditure from time to time. The value of such an arrangement would be that the Committee would have access to the collective opinions and advice of those who have practical experience of achieving value for money in the day-to-day operations of their businesses. While the methodology to be used has not yet been established the Committee expects to make rapid progress on this proposal in the coming months.

4. LIAISON WITH OTHER COMMITTEES

The Committee liaises with the Committee of Public Accounts to ensure that (a) as far as possible there is no overlap between the two Committees and (b) both Committees will keep up to date on one another’s activities. The Committee is also aware of the work of the Joint Committee on Commercial State-sponsored Bodies and envisages a regular exchange of views between the Committees.

5. EXPANDING THE ROLE OF THE COMPTROLLER AND AUDITOR GENERAL

5.1 The Committee has been considering how it can link up with the activities of the Comptroller and Auditor General with whom there was an information session earlier this year (Minutes of Evidence, 31 January, 1984 - published by the Stationery Office). This question and the concept of a Public Expenditure Commissioner was discussed in the 1981 Government Discussion Paper “A Better Way to Plan the Nation’s Finances” (Stationery Office Pl. 299). The relevant extracts are set out in Appendix C.

5.2 A resolution, adopted by the Committee on 25 September recommended that the terms of reference of the Comptroller and Auditor General should be expanded so that his relationship with this Committee will be formalised (Appendix D).

5.3 The Committee, in consultation with the Committee of Public Accounts and other appropriate authorities, will focus on this important issue in the coming months so that the most effective methods will be used in the review of public expenditure programmes.

6. LIAISON WITH E.E.C. COMMITTEES

The Italian Chamber of Deputies recently decided to hold an inaugural meeting of “Budgetary Commissions” representative of Deputies of Parliaments of EEC countries.

The meeting is intended to discuss, inter alia, methods used to control/evaluate public expenditure. The Committee on Public Expenditure was represented at the first meeting in Rome in July. A further meeting was arranged for February, 1985.

7. VISIT BY WEST GERMAN PARLIAMENTARIANS

Nine West German Parliamentarians, with particular responsibility for overseeing social welfare/health expenditure, were in Ireland in July on an official visit and the Committee met the delegation and following a mutual exchange of information on the respective roles it was agreed to maintain contact in the future.

8. RECENT DEVELOPMENTS

The Committee, during the meetings held in September, considered the following major issues:-

8.1. Cost of public works type employment

Information based on an enquiry with a selected number of Local Authorities indicated that the cost to the Exchequer was greater overall in the case of persons who worked on a short-time basis and received social welfare payments for the periods they were unemployed, compared with working on a full-time basis. Because of its concern at the impact on public expenditure the Committee has initiated a comprehensive review of the operation of short-time working by all Local Authorities. The Department of the Environment and the Department of Social Welfare will be closely involved in this process.

8.2 Public Service suggestions scheme

At the request of the Committee the Department of the Public Service will arrange for the introduction of a system (operating within suitable guidelines) whereby civil servants will be able to convey constructive suggestions on public expenditure to the Committee. This scheme would complement the suggestions and submissions received from the public in response to the Committee’s advertisements in the National press last January (par. 2.3 above).

8.3. Control of capital expenditure

The Committee found evidence of (a) major cost overruns in the case of a number of capital projects and (b) examples of projects that were cancelled after payments had been made in respect of professional fees, site development etc. It was decided to write to all Departments/Offices setting out, to the extent that they do not exist already, stringent guidelines for control of expenditure on capital projects, from planning to completion. In particular, the Committee wished to ensure that true costs were shown in all cases e.g where projects were cancelled and certain expenditure had already been incurred.

8.4 Fraud

Evidence was heard of cases of fraud in the Departments of Labour and Social Welfare. The Committee felt that certain types of fraud were avoidable and that more stringent checks and control procedures should be introduced immediately.

8.5 Foreign borrowing

The Committee considered the question of the proportion of foreign borrowing in U.S. dollars and the effect on the level of interest paid, in the light of the strength of the dollar vis-a-vis the Punt. The Committee’s views were taken up with the Minister for Finance.

9. GENERAL

The Committee is confident that it has now embarked on a systematic review of Departments/ Offices and State-sponsored bodies falling within its terms of reference and is satisfied that its main objective of greater effectiveness in public expenditure programmes is attainable. The task will be difficult at times but, on the basis of the Committee’s experience to date and the co-operation of all those with whom the Members have had contact there is no reason to doubt that equally good progress can be made in the future.

Michael Keating T.D.

Chairman

2 October, 1984.