Committee Reports > List of Committees > Dáil > 1986 > Committee on Public Expenditure > Report No. 20 - Schedule of recommendations relating to immediatelly implementable public sector savings and management improvement

Foreword

The Committee has, at the end of each year of its operations, issued a progress report summarising its main recommendations and indicating what action, if any, has been taken or what response or reaction arose from the recommendations.

The Committee, in April of this year, decided to issue a list of dispensable practices and procedures to coincide with the Budget Preparation Process.

To this end it reviewed the submissions made by the public in response to the Committee’s advertised invitation and requested its Business Advisory Panel to review expenditure programmes and make submissions.

The Committee considered the various recommendations arising from these sources and those arising in the 19 reports emerging from their own work as already laid before the Dáil.

Because of pressure of its own work programme and its wish to be timely in the issue of this report so that it could be constructively considered in the budget preparation process, the Committee decided to confine its attention to the main recommendations in its own reports, observance of which was likely to be immediately feasible and to result in immediate savings to the Exchequer.

In many cases the recommendations identify the need for increased accountability and managability and management effectiveness rather than specific cuts but the Committee is convinced that these changes in procedure or structure are likely to result in significant immediate savings arising directly from the decisions of people given proper accountability and an adequate management brief.

List of Recommendations

Capital Projects

1.1 Revise and clarify the terms of the Department of Finance Circular 1/83 as the basis for appraising and processing capital projects by Government Departments and draft a seperate parallel guidelines for State-sponsored Bodies and other agencies other than Government Departments who undertake projects funded from the Exchequer.

1.2 Add a provision that funds must be specifically approved for expenditure on appraisal of capital projects and appraisal budgets should not normally be allowed to carry over from year to year.

1.3 Add a provision that the prospectus of any Public Capital Programme requiring Exchequer expenditure in excess of £10m be laid before the Dáil within 30 days of budgetary provision being made for it in the Public Capital Programme.

1.4 Reduce considerably the provision for professional fees and inflation in future capital projects.

1.5 Revise the Dublin Dental Hospital and Defence Headquarters project approvals with a view to formulating more appropriate and more cost-effective alternatives.

1.6 Revise the system of comparing the benefit of purchase/ building/leasing in the appraisal of public capital projects to allow the Government to benefit from prevailing market conditions and to remove inherent bias in favour of building over leasing in the present system.

1.7 Enforce the revised regulations throughout the public sector on all Exchequer funded public capital programmes by appropriate budgetary and other sanctions.

1.8 Oblige all Government Departments entering into property leases and purchases to commission comprehensive structural surveys and require that the full normal guarantees against structural defects apply.

1.9 Render public capital projects accountable to planning legislation on a comparable basis with private projects.

1.10 Revise O.P.W. office space allocation norms with a view to reducing the proportion and size of individual private offices in line with international trends and trends in the private sector at home and abroad.

1.11 Establish a competitive system for selecting architects for public buildings.

1.12 Require local authorities to dispose of site stocks in excess of 5 years requirements and to license sites to builders prepared to undertake the construction and sale of approved schemes of affordable homes to people drawn from the local authority housing list.

1.13 Commission a study of the relative cost benefit of direct and contract work on road works and other capital projects undertaken by local authorities and revise the guidelines accordingly.

1.14 Authorise public utilities entitled to undertake road excavations to complete their own making good and change the present charge system to a charge per traffic lane per hour of peak traffic disruption.

1.15 Provide seed finance for a joint utilities computerised mapping system for Dublin on the lines successfully piloted in Cork to reduce the amount of exploratory excavations being undertake in Dublin and the number of accidents and breakdowns arising from inadequate mapping.

Exchequer Funding

2.1 Reduce the proportion of public sector debt denominated in currencies outside the European Monetary System.

2.2 Negotiate a central block of leasing finance for use in funding the approved expenditure by State-sponsored bodies on equipment and fittings and, in particular, to assist in the funding of computerisation and new technology in the public sector.

2.3 Recover the proportion of the cost of fisheries protection of E.E.C waters over and above the proportion of the Irish catch as provided for at the Meeting of European Council of Ministers at the Hague in 1979. This amounts to 80% or some £16m. per annum on the basis of 1985 costs.

2.4 Incorporate in the public sector accounting system a charge for interest at the targetted rate of real return of 5% on all future approved expenditure on capital projects and provide for an additional surcharge to be recovered from revenue expenditure on additional or over run expenditure where it arises.

3. Management of the Public Office portfolio

3.1 Review, reorganise and restate the mandate of the Office of Public Works and, in particular, the basis of their relationship with client Departments in executing public capital projects.

3.2 Oblige all Government Departments to identify all dispensable or unused buildings and facilities so that they can be scheduled for disposal within the year in which they become idle or dispensable.

3.3 Review all existing rent agreements with a view to improving terms to reflect the prevailing market.

3.4 Direct the management of new capital projects directly to the Department concerned or to third parties pending the outcome of the review of the Office of Public Works.

3.5 Allocate a discretionary maintenance budget expressed as a sum per square metre of accommodation to the occupant Department or agency in the case of offices under the maintenance of the Office of Public Works.

4. State-sponsored Bodies

4.1 Phase out the involvement of Bord Iascaigh Mhara in banking.

4.2 Establish a new Animal Health Executive Unit with a budget cofunded by farmers’ levies and the Exchequer to undertake approved disease eradication programmes and, in particular, T.B. eradication.

4.3 Establish a National Forestry Estate Management Agency obliging it to increase the National Planting programme to achieve the laid down Government policy objectives and enabling it to dispose of forest estates where by reinvestment of those funds increases in the average financial yield of the total forest estate can be achieved.

4.4 Assign the total Tourism promotion and development grant to Bord Fáilte charging it with responsibility to enter into agency or other agreements with SFADCo and other relevant State-sponsored bodies to ensure the maximum benefit in the achievement of the laid down objectives of Tourism policy.

4.5 Rationalise the State-sponsored bodies involved in manpower, training and placement on the lines already proposed by this Committee and reflected in the Government’s White Paper commencing immediately with a composite budget allocation to be assigned between the agencies on the basis of an agreed rationalised work programme.

4.6 Rationalise the State-sponsored bodies involved in servicing the development of the fishing industry and, in particular, reduce and streamline public sector control, regulation and funding relating to the development of aquaculture.

4.7 Rationalise the State-sponsored bodies engaged in industrial development promotion by, in the first instance, granting a composite and reduced budget allocation to be assigned between the agencies on the basis of an agreed work programme for 1987 and an agreed longer term rationalisation programme.

4.8 Provide that the Boards of State-sponsored bodies receiving an annual grant-in-aid be obliged to submit their annual report and audited accounts to the responsible Minister and to lay them before the Dáil not less than 90 days before budget day for them to be eligible for a grant-in-aid in that budget.

4.9 Require that the accounts of all State-sponsored bodies comply in full with the Standard Statements of Accounting Practice and best accounting practice and show all liabilities contingent and otherwise including pension interest and depreciation.

4.10 In this regard State-sponsored Bodies should be deemed to include all bodies whether incorporated or not - whether private, voluntary or public which are sponsored by an annual grant-in-aid from the public. Though the number seems to be literally unknown the Committee considers that there is at least 1300 bodies within this definition. Consideration of their relative claims on Exchequer funding is only possible if they are obliged to present their accounts and if these accounts comply with the appropriate standards.

4.11 Transfer responsibility for the Voluntary Health Insurance Board to the Department of Industry and Commerce which is responsible for regulating all other insurance companies. Provide for its mutualisation and terminate its monopoly on health insurance while at the same time allowing it to sell other forms of insurance.

5. Accounting for the Public Sector

The annual reports and accounts of all Local Authorities and Government Departments should be revised to comply with best Government accounting practises. Accounts should include interest charges on capital projects, if any, accruals and a note on the actuarial liability relating to future pensions.

5.2 Each Government Department and Local Authority should be obliged to have laid before the Dáil an up-to-date annual report and audited accounts within 90 days of the Second Reading of the Finance Bill.

5.3 Merge the Office of the Comptroller & Auditor General and the Local Government Auditors, withdraw the C & A.G.. from the audit of State-sponsored Bodies where this is not explicitly excluded by statute and provide for the necessary additional staff under contract to bring the audits up to date.

5.4 Require the Comptroller & Auditor General in his annual report to comment on the adequacy of actions taken in response to items noted in his previous report.

5.5 Appoint a qualified Accounting Officer in each Government Department.

5.6 Increase the discretion of each State-sponsored body within an approved budgetary limit to take effect in parallel with the increased reporting responsibility through an improved accounting system.

5.7 Provide for audited accounts to accompany the annual report and accounts of this and other Oireachtas Committees to coincide with a grant of increased discretion in relation to the deployment of their approved budget allocation.

6. Grants Subsidies payments and Receipts by the Public Sector

6.1 Provide for adequate control on “cash equivalents” issued by Government Departments such as certificates, motor tax discs, children’s allowance books, medical cards, grants, stamp duty, company registration fees etc.

6.2 Provide for full and proper reconciliation of all receipts for all forms of certification issued by Government Departments.

6.3 Provide for a range of box sizes to match herd sizes in the submission of blood tests under disease eradication schemes. This will reduce the enormous waste of blood test kits referred to by the C & A.G. in his report which arises from the requirement to return each herd test in a separate box.

6.4 Control stock purchases of equipment note paper and all materials in all Government Departments through the application of the appropriate modern just-in-time inventory control systems.

6.5 Rationalise the operations of the Departments of Health and Social Welfare particularly in relation to the issue of medical cards and supplementary benefits.

6.6 Maintain a competent expert panel to be availed of as required at the expense of the beneficiary in the case of all grants paid out of the Exchequer whether by Government Departments or State-sponsored bodies.

6.7 Drop maternity grant, calf premium and other schemes where the amounts are nominal and only a small proportion of the total cost of the scheme.

6.8 Introduce a charge card system on a pilot basis to cover the expenses of officials in the course of official travel.

6.9 Bring forestry grant packages into alignment with those available from the European Community with a view to ensuring the least cost to the Exchequer.

In particular bring the grant package available outside the Western Region into alignment with EEC forestry aids and provide for the headage payments component for small farmers in disadvantaged areas undertaking investment in forestry.

Acknowledgements

This report emerges as a by-product of the work of the Committee since its first meeting in September, 1983. It draws together the most immediately implementable recommendations emerging from its work and in particular from the 19 reports already issued by the Committee.

In presenting this report the Committee wishes to acknowledge the support and expertise provided by the Members of the Business Advisory Panel and their work in reviewing particular areas of public expenditure and preparing briefing material for submission to the Committee.

The Committee wishes also to acknowledge the submissions of hundreds of citizens throughout the country including a large number of public servants.

The Committee considered all these sources together with its own work to date in preparing this short report.

The question of public expenditure cuts is always sensitive and the question of control accountability and managability even more so. But the members of the Committee in preparing this report recognise their responsibilities both as public representatives and as members of the Dáil Committee on Public Expenditure.

In acknowledging this it is fitting that I, as chairman, thank my colleagues on the Committee for their work and particularly for the cooperation and participation which has led to the issue of this report.

Michael Keating T. D.

Chairman.

17 October, 1986.