Committee Reports > List of Committees > Dáil > 1990 > Committee of Public Accounts > Final Report - Appropriation Accounts 1988

AN COISTE UM CHUNTAIS POIBLÍ

(Committee of Public Accounts)

Déardaoin, 14 Meitheamh 1990

Thursday, 14 June 1990

The Committee met at 11 a.m.

Members Present:

DEPUTY G. MITCHELL in the chair

Mr. P. L. McDonnell Comptroller and Auditor General and Mr. Noel Lindsay, Secretary, Department of Education called and examined.

VOTE 27 — OFFICE OF THE MINISTER FOR EDUCATION.

Mr. N. Lindsay called and examined.

Chairman.—Paragraph 34 of the Comptroller and Auditor General reads:

National Lottery—Grants for the provision of Major Sports Facilities

In March 1988 the Government decided to locate a National Sports Centre on a site adjacent to the existing Custom House Docks site and the Custom House Docks Development Authority was appointed as agent of the Minister for Education to oversee the development of the project, subject to guidance from a high level National Sports Centre Steering Committee comprising representatives of the Departments of Education, Finance, Environment and the private sector. In 1988 a total of £987,390 was paid to the Custom House Docks Development Authority out of the Department’s allocation of National Lottery moneys and used as follows

In addition to the National Sports Centre the Government also approved a programme for the development of a National Basketball Centre, six major Regional Sports Centres and eighteen Local Sports Centres in provincial towns throughout the country. During 1988, £300,000 was paid towards the provision of a running track at one Regional Sports Centre and £63,904 was paid towards the construction costs of two Local Sports Centres.

Mr. McDonnell.—All I am doing in paragraph 34 is giving some information on a new area of activity, that is, the provision of grants for major sport facilities from national lottery moneys. I thought that as substantial sums were intended to be spent in this area and as it is a new area, it would be helpful to give a breakdown on the expenditure in the first year. There was further expenditure in 1989 of just under £2 million most of which was spent on the National Sports Centre but essentially the paragraph is for information because of the new nature of the expenditure.

Chairman.—Mr. Lindsay, is the National Sports Centre still to be located adjacent to the Custom House Docks site?

Mr. Lindsay.—Yes, that is certainly the intention. About half of the site has been acquired and, as you are probably aware, there has been a CPO placed on the site. The report of the inspectors is before the Minister at present.

Chairman.—And it says here that in addition to the National Sports Centre the Government have also approved the programme for the development of a national basketball centre, six major regional sports centres and 18 local sports centres in provincial towns throughout the country. Could you tell the Committee where they are to be located, that is, if a decision has been taken.

Mr. Lindsay.—I can give your Committee a list of the locations of both the regional centres and the local centres.

Chairman.—Do you have it there with you?

Mr. Lindsay.—I do not have it readily available but I can certainly get it to you in the next few days.

Chairman.—That will do fine.

Deputy Flood.—This is the first time I have met Mr. Lindsay in session and I want to wish him well in his relatively new position and to say how impressed we all are with our contacts with him and his staff. In relation to the reference to the national basketball centre — how much has been allocated?

Chairman.—It was remiss of me not to welcome you, Mr. Lindsay. I wish to be associated with Deputy Flood’s remarks about your presence in the Department and your apprearances before this Committee since your appointment.

Deputy McGahon.—Could I ask Mr. Lindsay if the regional sports centres have all be allocated.

Mr. Lindsay.—Yes. They are to be at Galway. Athlone, Sligo, Cork and Waterford while the National Basketball Centre is to be at Tallaght.

Deputy McGahon.—Could I ask Mr. Lindsay why Dundalk was not considered. It is beside the Border, ideally located for crossborder participation and sporting events. Why, then, was Dundalk, as the biggest town in the country not allocated a regional sports centre?

Chairman.—I think that is a policy decision which the accounting officer does not have responsibility for.

Deputy McGahon.—I wonder who has responsibility for Dundalk.

Deputy Dennehy.—My question is a bit parochial and about one of the regional sports centres, the Cork one. There seems to be some difficulty between the allocation of funding, that is £1.7 million, and the scheme submitted by the local authority which was for approximately £2.2 million. Has that situation been sorted out, has some kind of agreement been reached and, if so, what stage is the planning at?

Mr. Lindsay.—If I make a general statement with regard to how these centres are being procured, I think it will perhaps answer the Deputy’s question. There are limited amounts of funds available in the context of the type of ambitions people have in each regional centre with regard to the range of facilities that should be provided. What was determined was that following the example of what was decided for the National Sports Centre there should be a procurement on the basis of design, finance, build and management with the stipulation of the limit of funds that were available from central sources for that. The upshot of that is that you could well expect a considerably greater provision of facilities in a particular centre through a combination of public and private resources. In the case of Cork there is in fact a private group extremely interested in developing a centre there so that there would be a question of joining both the public initiative and the private initiative to provide a wider range than would be possible using the resources allocated from the lottery funds. It would be hoped in the case of Cork that this combination would provide a much wider range than had been visualised for Cork.

Deputy Dennehy.—In that context there does appear to be a difficulty in that the private group as you describe them have one location and the public have a different one and there appears to be a difficulty. The official line from the local authorities, who are the guiding force in this, would be that the regional sports complex, which is the proposed public location, should be used as I have said they have submitted a scheme involving £2.2 million which is very important in the context that one of the factors built into it is that the project must be viable, it must be self-financing and it is felt that this was the lowest figure that would make the project self-financing. Has the conflict as between the two sites been sorted out, the proposed public site and the private one?

Mr. Lindsay.—No Chairman. That point is still being discussed but the overall question of it being self-financing, which is a major consideration, does in fact take in the involvement of the private sector anyway because I think we would have very little expectation unless you had this double involvement that you would achieve this concept of self-financing. Every effort is being made to bring the two parties together in Cork but the matter has not been resolved yet.

Deputy McGahon.—Could I ask Mr. Lindsay what is exactly envisaged in the National Sports Centre? What will it encompass? It is to be a national arena but what will it be — a soccer pitch, a running track, boxing facilities? Can you give us a breakdown of what will actually be in the National Sports Centre in Dublin.

Mr. Lindsay.—It will consist of three main facilities. There will be a very large arena, an ancillary hall and a swimming pool complex based essentially on a 50 metre swimming pool. The main hall itself will accommodate pretty much the full range of indoor activities and will include a running track. Because you have a running track the actual size of the hall it would encompass all of the range of facilities for indoor activities that you could mention. The ancillary hall then is intended to provide also for indoor activities but also to ensure that in fact the facility would be available for sporting activities all of the time on the basis that the main arena will on occasions be used for non-sporting activities as part of its revenue earning capacity but there would be a facility continuously for sporting activities if you take the three facilities together.

Deputy McGahon.—There will not be a football pitch or pitches?

Mr. Lindsay.—There will not be football pitches as such but you could play five a side.

Deputy McGahon.—It is an indoor affair.

Mr. Lindsay.—Yes.

Deputy McGahon.—But it will be up to international standards for every sport it is available for?

Mr. Lindsay.—One of the conditions of the tendering process is that it would actually meet international standards.

Deputy McGahon.—It is not likely to be self-financing, no matter who goes into it.

Mr. Lindsay.—In fact it is a requirement of bidding for it that it should be self-financing with the exception that the swimming pool complex may in fact get an annual subsidy which has yet to be determined. Otherwise, it is a matter for the consortia. It is not being left as a separate matter of building it and then arranging for the operation of it. It is a total package, in other words the consortia must come up with proposals to ensure that in fact not only will it be built in accordance with specifications but that it will be managed on a self-financing basis during the period in which the consortia have responsibility for it.

Deputy McGahon.—What time scale are we talking about?

Mr. Lindsay.—It will probably be sometime next year, perhaps in the spring, that construction will start and it will take about two years to build.

Deputy McGahon.—Have tenders been sent out or have the private sector been contacted and, if so, what type of response have you got from them?

Mr. Lindsay.—There was an extraordinarily good response. The consortia have been shortlisted to four and the tender documentation will actually be furnished to them sometime next month.

Deputy McGahon.—So there is no shortage of partners?

Mr. Lindsay.—At this point, no.

Deputy Dennehy.—First, to go back to the Cork question, the advertisment was placed, and, with the same view as Deputy McGahon’s, I ask what was the response to that from consortia outside?

Mr. Lindsay.—I think you know, Deputy, that in the case of the recent centres the actual operation is ongoing, I really would not be in a position to give information with regard to that at this point.

Deputy Dennehy.—On the national one, can I ask what is the maximum crowd capacity?

Mr. Lindsay.—We are leaving it flexible because, in fact, the whole objective is to involve the private sector who have experience in the management of such centres and who would be responsible for it. What we would be expecting would be a capacity of about 10,000 upwards between fixed seating and non-fixed seating.

Deputy Dennehy.—Although my knowledge of Dublin geography is not as great as that of many others, travelling around the Custom House Docks site I was wondering about the practicality of bringing between 10,000 and 15,000 or 20,000 people to an area. Is there any difficulty in the actual location from the point of view of crowds coming in and being managed and so on.

Mr. Lindsay.—I think that any of us who have been to the Point Depot will know there is a significant problem in that area, but you are probably aware that this is subject to a traffic study at present with regard to whether the quays should be pedestrianised and what kind of traffic would be created. It certainly is a most relevant question, but it is actually being examined on a traffic study basis.

Chairman.—Mr. Lindsay, before we leave this question of grants for the provision of major sports facilities and since you are the Accounting Officer for the Sports vote, I might take the opportunity to say I am sure the Committee have noted the great profile the country has taken on in the sports arena in the last decade with people like Stephen Roche and Barry McGuigan and now even that honorary Irishman Jack Charlton. Since they are the first Republic team to reach the world cup finals the Department might consider honouring them and honouring the Irish supporters in some way since they have reflected very well on the country. I think it would be a very appropriate thing for the Department with responsibility for sport to do.

Mr. Lindsay.—I think, Chairman, that the Taoiseach has, in fact, paid great tribute to them already and I have no doubt that regardless of the further outcome of the games there will be a very extensive reception for them. As regards the honour that might be conferred, I would not know about that but certainly they deserve great credit for what they have done.

Chairman.—I would like to suggest to you now that, since you are the Accounting Officer for the sports vote, you might consider conferring some special honour on the Irish team and on their supporters for reflecting so well on the country. It is something which would be greatly appreciated. The second suggestion is that you should arrange for the Committee of Public Accounts to be there at the finals.

Deputy McGahon.—I was hoping that you would say that, Chairman. You can bring the Comptroller and Auditor General to the match as well.

VOTE 28 — FIRST LEVEL EDUCATION.

Mr. N. Lindsay further examined.

Chairman.—Paragraph 35 of the Report of the Comptroller and Auditor General reads:

Public Service Early Retirement Scheme

Letters and payable orders issued by all Departments are collected by An Post for posting. During an audit of public service early retirement lump sum payments made to primary teachers I noted that the Department of Education had detected the irregular negotiation of two payable orders. The Department had been alerted by a teacher’s enquiry regarding the receipt of a letter purporting to be an official notification that payment of her early retirement lump sum would be delayed due to a computer error. Following further investigation it transpired that two more of the 374 lump sum payable orders issued by the Department on the same day had not reached their Athlone destinations and in one of these cases a similar letter had been received by the teacher concerned. Two payable orders to a value of £40,295 had been irregularly lodged to accounts in Dublin branches of two building societies from which partial withdrawals had been made. The payable orders had been honoured by the Paymaster General before the irregularities came to light. The other missing payable order had not been cashed nor had the teacher received any letter and the payable order was subsequently cancelled by the Department.

As this suggested that there may have been some inadequacies in the Department’s internal security and controls I asked for information as to how the payable orders might have been obtained and irregularly lodged and whether any other cases had since come to light. I also inquired as to the steps taken to recover the amounts from the building societies which gave value for the payable orders.

The Accounting Officer informed me that the two payable orders were illegally intercepted within the postal system and fraudulently negotiated by falsely endorsing the teachers’ names on the payable orders and opening accounts in the teachers’ names in Dublin branches of two building societies. It was understood from contacts with the building societies that a total of £30,600 had been withdrawn from these accounts within two week of the accounts being opened and that £9,695 remained in the accounts. Investigations had shown that no other payable orders were irregularly cashed from the batch concerned. Charges in relation to the fraudulent negotiation of the payable orders were being brought against two persons and the Department had made a claim against the building societies for the refund of £40,295 and the matter was in the hands of the Department’s legal advisers. The Accounting Officer also stated that the circumstances in which this incident occurred did not indicate any inadequacy in the Department’s procedures which are reviewed on a regular basis.

Mr. McDonnell.—What we are dealing with here is the interception of two payable orders of the Department apparently at some stage in the postal system and their subsequent irregular lodgment to building society accounts in the names of the proper payees and with false endorsements of the payees’ names and the making of fraudulent withdrawals from these accounts by two people who were later apprehended by the Garda. This happened in August 1988 or thereabouts and it was unclear at what stage the interception of the payable orders took place. As the Chairman will remember, a somewhat similar incident occurred in the Collector General’s Office a few years ago, so I was concerned that perhaps the breakdown in control might have been at the Department’s end, but you will see from paragraph 35 that the Accounting Officer has assured me that this was not so.

Finally, I believe the question of recovering the amount concerned, which was just over £40,000, from the building societies is still with the legal people.

Deputy M. Ahern.—With regard to this, the people that were involved seem to be within the postal system rather than within the Department. Have all other checks and investigations that have gone on led to the satisfaction of the secretary that there is nobody within the Department connected with the people who did the intercepting?

Mr. Lindsay.—Yes, you are probably aware that, in fact, the two people who were responsible were apprehended and brought to court. It was a husband and wife team who had been guilty of previous offences. One of them was sentenced to four years and the other to four and a half years. They were not willing to disclose where they intercepted it but the general acceptance is, including with Gardaí, that it took place within the postal system itself. There is every reason to be sure that it did not take place in or there was no connection with the Department. We are absolutely convinced on that and, as I said, the Garda have accepted that that was almost certainly the location of it. They were unable to get the couple concerned to confess how they actually did it.

Chairman.—So what happened was that there were three cheques. What happened to the third cheque, did it ever turn up?

Mr. Lindsay.—The cheques were all lodged.

Chairman.—The third one?

Mr. Lindsay.—That third cheque was cancelled.

Chairman.—There was no attempt made to negotiate that particular cheque?

Mr. Lindsay.—No.

Chairman.—Of the other two cheques valued at £40,295—

Mr. Lindsay.—Yes.

Chairman.—The couple concerned had withdrawn £30,600 from the building societies shortly after they lodged the amounts. Was any of that recovered?

Mr. Lindsay.—Not that amount. The Attorney General is satisfied that the Department have a case against the building societies and there have been ongoing negotiations with the building societies. There is a certain amount of money still in the building society and the Department sought to have that re turned. The building society was not willing without the authorisation of the payee who refused to give it. The Attorney General is in fact taking proceedings against the two building societies concerned for the recovery of the money.

Chairman.—With regard to this couple, they were not civil servants, they were not working for your Department?

Mr. Lindsay.—Oh, no.

Chairman.—Were they working for any State agency? Were they working for the postal service?

Mr. Lindsay.—I cannot be sure from the information here, but I think that I could state categorically that they were not; otherwise how they got the cheques would have been clear and in fact it was not.

Chairman.—What I do not quite understand — and the Comptroller and Auditor General referred to the previous experiences the Committee had with the Revenue Commissioners — is how they knew how to intercept these particular envelopes. What is your understanding of that situation?

Mr. Lindsay.—We do not know how they apprehended them, we do not know the source of their information. They have been guilty of a variety of other crimes. Presumably information would be available that cheques are issued and they may simply have known the form that the envelope containing the cheque would take.

Chairman.—How were they actually extracted from the Post? Was it done within your Department? After it left your Department? At the sorting office? From the postman?

Mr. Lindsay.—When it left the Department, and that is absolutely certain. It had to be within the postal system itself. That is the general acceptance by the Garda.

Deputy McGahon.—I find this case staggering, as I do many similar-type cases that we have discussed over the years, Chairman. In my opinion these people had to have accomplices. They did not practice telepathy; they had to be alerted as to when the cheques were being sent. They are obviously consultants in this field. What has happened the £30,000? Is it in a Jersey Island bank? Four years is a very short price to pay for maybe a flat in Spain, or a villa. Why should you go after the building societies rather than the people who took the money?

Mr. Lindsay.—I think the answer to that is fairly clear. The couple concerned were prosecuted. The courts considered that the four year and four and a half years sentences were appropriate sentences.

Deputy McGahon.—Why did they not have to repay the money themselves?

Mr. Lindsay.—Because they had no assets and it was not possible to get any money from them.

Deputy McGahon.—They had no house?

Mr. Lindsay.—No.

Deputy McGahon.—Where were they employed? Were they employees of An Post?

Mr. Lindsay.—No, they were not employees of An Post. I should mention in relation to one point you mentioned, Deputy, that there are tens of thousands, hundreds of thousands of cheques issued. These particular cheques were not earmarked. It just happeneed to be a number of cheques of a huge variety of cheques that are issued.

Deputy McGahon.—This couple were ordinary members of society and two cheques to the value of £40,000 happened to drop through the letter box. Is that the situation?

Mr. Lindsay.—No. The Garda were unable to determine where they did seize the cheques but they were satisfied that it was somewhere within the postal system.

Deputy McGahon.—Are you satisfied that there was nobody within the Department to alert those people that at a particular time or date these cheques would be sent out to the recipients.

Mr. Lindsay.—I am absolutely convinced that there is no collusion with anybody in the Department.

Deputy McGahon.—I do not know how you come to that conclusion.

Deputy Flood.—What were the two cheques individually valued at?

Mr. Lindsay.—I do not have the individual values of them.

Chairman.—I think the Comptroller and Auditor General has the figure?

Mr. McDonnell.—About £30,000 and £10,000.

Mr. Lindsay.—The second cheque was valued at just under £30,000.

Deputy Flood.—And this was made out to an individual?

Mr. Lindsay.—Made out to an individual teacher.

Deputy Flood.—What concerns me, Mr. Lindsay, is not so much that your Department was at fault — because it does not appear to have been at fault; it followed the proper procedures — as the role of the building society and how easy it was for these two payable orders to be intercepted, lodged according to the report, in a new account that was opened, and the substantial sums withdrawn within 14 days. The question I would ask is why were the building societies not more alert to this major lodgment in a new account, which I am sure because of its size must have gone up fairly high within the building society management and, then when suddenly two weeks later withdrawals were made, why that was allowed to take place as well. This is where there has been a slackness with regard to the intercepting of cheques. Hundreds of thousands of cheques go out every year and it appears to be so easy for individuals who get hold of these cheques and payable orders illegally to walk into a bank or a building society, open up a new account, lodge the payable order or cheque and then come back two weeks later and withdraw what is obviously a very substantial amount. I am pleased to see the question of legal action against the building societies is now being considered I hope it will be the end because I believe the building societies in this case have some responsibility. I would like to be able to see the cheques, how they were lodged, what signatures were put on them and what checks were carried out by the building societies who have a responsibility. Were the head offices of branch offices or two different building societies used or one?

Mr. Lindsay.—Could I say that I subscribe fully to what the Deputy said? That was my own question. I find it quite extraordinary that within a matter of days there could be such a substantial withdrawal from an account a few days after that account was created. That is the major weakness in it. The procedure about signatures becomes invalid if one can simply sign a cheque which creates the signature and then use the same signature to withdraw that very large sum of money. There were two building societies involved.

Chairman.—They were cash withdrawals. These people did not get a cheque from the building societies. They actually went in and withdrew cash.

Mr. Lindsay.—Yes, but what I mean is, presumably they would actually have to sign for that. The signature was simply the signature they created a few days earlier. I honestly believe there is a huge weakness in that because it means that it is the simplest matter in the world to cash any cheque as long as there is a few days’ grace.

Deputy Flood.—Which building societies were these?

Mr. Lindsay.—I would suggest that it would be preferable not to name them.

Deputy Flood.—I appreciate that statement. The fact is that a major irregularity has taken place. I hold the building societies responsible for what has taken place because nobody is safe with regard to any cheque or payable order or one’s own personal cheque book if they happen to be stolen when a system such as this allows for the withdrawal of such large amounts in cash. We had the same problem with the Revenue Commissioners and the banks where there were a lot of difficulties. Are we satisfied that we are going to pursue the building societies to the end in this matter so that the money can be properly refunded to the State and paid out to those who were entitled to it? Have those who have been entitled to it been reimbursed?

Mr. Lindsay.—On the last question, yes, they have been. On the first question, I will give you an assurance that it is our intention to pursue this to the bitter end through the Chief State Solicitor’s Office and the Attorney General’s Office.

Deputy Taylor.—Could I ask is it one society we are dealing with, one branch of one society where both these transactions were involved or were there two separate societies?

Mr. Lindsay.—There were two societies involved. It will not be the branch, it will be the society corporate.

Deputy Taylor.—Two completely different societies?

Mr. Lindsay.—Two completely different societies.

Mr. Taylor.—So they both acted in the same way?

Mr. Lindsay.—Yes, they did.

Deputy Taylor.—If, as you say, it is the intention to pursue this claim with all vigour, could I ask you, having regard to the fact that it is approximately two years on now, what stage the proceedings are at? Has it been to court yet? When is it going to be in court or whatever?

Mr. Lindsay.—That is a difficult question. We deal with the Chief State Solicitor’s Office and they are taking advice from counsel about it. It has not gone to court yet. The discussions between the Chief State Solicitor’s Office and counsel are still proceeding as to the best method of operation but I have not been able to find out when in fact the matter will be before the court.

Deputy Taylor.—You seem to be saying that legal proceedings have not been issued yet.

Mr. Lindsay.—That is what I am saying.

Deputy Taylor.—That is what you are saying?

Mr. Lindsay.—Yes.

Deputy Taylor.—Although it is two years after the event legal proceedings have not even been issued yet. Has counsel’s opinion been obtained yet?

Mr. Lindsay.—The last information I got was that the discussions were proceeding between the Chief State Solicitor’s Office and counsel.

Deputy Taylor.—I really do not know what that means. That is not the procedure. The procedure that applies is that the papers are assembled by the solicitor even if it is the Chief State Solicitor and they are sent down to a barrister to provide a written counsel’s opinion. Has a written counsel’s opinion been obtained yet in this matter?

Mr. Lindsay.—Chairman, we do not like to intervene in a matter of this kind between the Chief State Solicitor’s Office and counsel. Our information is that the Chief State Solicitor’s Office are in touch with counsel. What that has resulted in or when it will result I honestly do not know.

Deputy Taylor.—I am not suggesting for one moment that you should intervene or that the Department should intervene between the Chief State Solicitor and counsel. All I am saying is that you are entitled to know from the Chief State Solicitor if Counsel’s opinion has been obtained yet or not.

Mr. Lindsay.—To the best of my information, no.

Deputy Taylor.—Could I make a brief comment on the position? To say that this matter is being pursued with vigour does not bear up to the facts. It is some two years after the event. If this is let run on much longer without getting a writ issued, even if there was a claim against the societies, there could be technical legal questions involved there. It could become statute barred. I would not describe it as pursuing a claim with vigour when two years after the event (1) counsel’s opinion has not been obtained and (2) a writ has not been issued. That is not pursuing a case with vigour. If there is a case to be pursued with vigour counsel’s opinion could be obtained within a month and a writ could be issued within another month after that and even quicker than that if need be. Two years after the event is totally unacceptable. If there is a claim against the societies — and there may well be, I do not know — it does no good to the State to leave the matter lying outstanding for upwards of two years without even getting a legal opinion.

Mr. Lindsay.—Perhaps the two years might exaggerate the time that was available because, first of all, there was all the ensuing discussion with the Chief State Solicitor in relation to the case against the two people who were guilty of the theft; then there were the court proceedings against those. In addition to that, there was extensive discussion following the court case with the building societies to seek to get the money back without taking court action. The matter was then taken up again by the Chief State Solicitor’s Office when that did not succeed. so it really would not be a matter of a lengthy period. I do not know the exact time following the negotiations with the building societies, but certainly it would be a matter of months and not years.

Deputy Taylor.—A claim that the State would have in these circumstances against the building societies is a separate matter from a criminal prosecution against the two criminals concerned who were convicted of the fraud. There was no reason to await the conviction of these people before seeking a refund of the State’s £40,000 from the building societies if the State is entitled to do that. The first thing the State has to ascertain is whether the State is entitled to recover the £40,000 from the building societies and that will not be known until you get counsel’s written opinion and none of that has happened. It may well be that when counsel’s opinion comes in it may say that the State does not have a claim. I do not know what it will say; there are technical legal issues involved there. I am not satisfied, from the history of it, that the claim against the societies is being pursued with vigour. It is being treated in an excessively slow manner, in my opinion. Could I ask an incidental question on this just to get the format of how it works? Was it a cheque or a bank draft that was issued?

Mr. Lindsay.—A payable order.

Deputy Taylor.—Is that drawn on a bank or on the Central Bank?

Mr. Lindsay.—It is the Paymaster General.

Deputy Taylor.—There is no commercial bank involved like AIB or Bank of Ireland?

Mr. Lindsay.—No.

Deputy Taylor.—I think that we should follow this up and we should ask the Accounting Officer to let us know within another month or two if counsel’s opinion has been obtained and what it is, so that we can then consider what our attitude should be to the loss of these State moneys.

Chairman.—We will come to that at the close of the examination.

Deputy Dennehy.—I accept the point made by Mr. Lindsay in his evidence that the case is being pursued with vigour. We would have to say to Deputy Taylor and his associates that, for those of us who are not involved in the whole legal system, times seems to be of very little consequence in any case or any issue. Years and months do not really seem to matter, but that is a general point. To go back to Deputy Flood’s point, what we would question is the role of the building society in all of this. Taking the other points — and any fraud is bound to be a worry to us and has to be looked at carefully — to put into context the whole issue from the State Department’s point of view, first to all, the fraud was detected; secondly, there were only two cheques involved out of hundreds of thousands that go through. In this case there were only 374 in this particular batch. The people were apprehended by the Garda and we should congratulate the officers involved. There was excellent police work and excellent detection.

We should look to the areas of possible accomplices and the very fact that these people have not been detected does not mean that people will not be on their toes but we should look at this area to cut off the loopholes. That is our job, to cut out any possible recurrence. In the context of the case we should congratulate the personnel involved, on the police work, detection, the pursuance of the case and the fact that people have been jailed for carrying out this fraud. The role of the building societies is one that must be very seriously questioned. They were dealing with State moneys. While I take the point that you may not wish to name the building societies here, I would have expected that, if they are major national names, as a gesture of goodwill they would be most anxious to repay what is a very small amount of money in the context of what they are turning over, when State cheques were involved. Their practice seems to have been open to scrutiny, to put it very mildly. I hope what they will look at their own system and methods in the future.

Mr. Lindsay.—Could I just add to that, that I accept fully what the Deputy said. We are all quite astonished that the situation would arise where you would have to pursue the matter to the bitter end to get the money back. In relation to what Deputy Taylor has said, it is certainly not my experience of seeking counsel’s opinion that you get an opinion in one month. On the contrary, you could certainly count it in years and not in months. That is my consistent experience.

Deputy Taylor.—That is wrong.

Chairman.—We have given this a very good run and there are 12 paragraphs to get through, so a brief question from Deputy McGahon.

Deputy McGahon.—May I ask Mr. Lindsay if he has changed his system? If he is sending out a cheque for £30,000 or £40,000, does he not require the people to come to Dublin to receive it? Surely it is a worth-while journey. Could I also ask how this case came to light? Did the two teachers involved alert the Department? Was there any communication? Did they receive anything in the past to tell them that cheques had been delayed or anything of that nature?

Mr. Lindsay.—That is a very perspicacious question if I may say so, Deputy.

Deputy McGahon.—That is why I asked it.

Mr. Lindsay.—Yes, they did, but not from the Department.

Deputy McGahon.—That is the nub of the problem. Could you throw some light on this?

Chairman.—This is really very brief.

Deputy McGahon.—This is very pertinent to the matter. Apparently they received a communiqué on State notepaper. Did they?

Mr. Lindsay.—I am just confirming that, to be sure. No, it was not on——

Deputy McGahon.—But they did receive a communication, allegedly from the Department that the cheques had been held up due to a delay within the Department.

Mr. Lindsay.—Yes.

Deputy McGahon.—That is very serious. How did they communicate? What type of notepaper was it on?

Mr. Lindsay.—“The Department of Education” was typed on ordinary notepaper, which should have alerted the teacher. In fact the teacher contacted the Department wanting to know what this delay was all about and it was immediately then——

Deputy McGahon.—But how would they have known? That was a very sophisticated part of the crime. I hope they did not send out Oireachtas envelopes.

Mr. Lindsay.—I am sorry, what is it that they should know?

Deputy McGahon.—It certainly was a very sophisticated part of the crime, that these people who had masterminded the crime were aware of delays in the Department and took it upon themselves to send a reassuring note to the teachers that there was a delay and that the cheques were being held up. That obviously gave them time. But does it not suggest that perhaps somebody in the Department whispered a word in their ears?

Mr. Lindsay.—Not at all, Deputy. There are no delays in the Department.

Deputy McGahon.—Are you joking?

Mr. Lindsay.—It would have been highly exceptional for a cheque to be delayed. In fact they knew the Department that was involved, from the payable order. So, being people who were involved in crime on a continuous basis and who had a number of previous convictions, we would expect ingenuity from them. They very wisely sent this letter out.

Chairman. You have travelled this very far.

Deputy McGahon.—Maybe you could take them on as consultants. Have you changed the system? Do you still continue to send out cheques into the wind?

Mr. Lindsay.—We do not send them out into the wind but we still send out cheques. I do not think it is practical to do it any other way.

Chairman.—I am going to bring this to a conclusion now.

Deputy Taylor.—I just want to make a brief point in relation to what actually happened here. Perhaps Mr. Lindsay does not know. Did the criminals who opened the accounts in the building societies do so in their own names or in the names of the people to whom the pay orders were addressed? You may not know the answer to that.

Mr. Lindsay.—It is in the name of the people to whom the payable order was addressed. That is really how simple the fraud was. It is a very simple matter. As the Deputy said, there is a real vulnerability in the financial system there — if a person can lodge a cheque in that way and a few days later just withdraw the money without any identification.

Chairman.—I think it is very clear that the building societies are at fault in this case. I have listened to what everybody else has said and I am giving my opinion at this meeting here this morning. I agree with Deputy Flood, I think the building societies should be named but I will not press you to name them here in case it should prejudice any case. If these moneys are not refunded in full and with interest the societies concerned will be named at this Committee. We will not just name them at this Committee but we will seek the advice of the House on the matter. I do not think the State should be expected to be vulnerable in this particular way. This is not the first occasion it has happened. There were five-figure sums when building societies were used in the case of the fraud on the Revenue Commissioners. I think there is an expectation that because it is the State, that somehow the money will not be pursued but it should be pursued, and I commend you in that respect. I would also go along with what Deputy Taylor says, I think we should have a report on this matter from you — maybe in a month or two if you would let the Committee know what the up-to-date position is and if you would ensure that the case is pursued with all vigour.

Mr. Lindsay.—Certainly I will do that.

Chairman.—We will note the paragraph.

Paragraph 36 of the Report of the Comptroller and Auditor General reads:

In 1988 some £5.2 million was charged to Subhead A of Vote 28 in respect of salaries of substitute teachers employed locally by Boards of Management in circumstances where primary teachers were absent due to certified sick leave, maternity leave, jury service or approved absences for educational reasons. The Departmental rules for primary schools state that substitutes should be qualified primary teachers, although it is recognised that for occasional, brief and unforeseen absences a qualified substitute may not always be available. However, where the substitute requirement may be anticipated, and especially in regard to longer absences. Boards of Management are required to make every effort to secure the services of qualified substitutes and it is the Department’s policy to seek to ensure that all teaching duties in primary schools are being carried out, as far as possible, by fully qualified teachers.

Payment to teachers in respect of substitute service is made on the basis of a standard application form which is submitted to the Department by the school Board of Management. Application for payment is made only when the substitute has completed service, where the service is for less than a month, or on a monthly basis where the service is for a prolonged period. The application form indicates whether the substitute teacher is qualified or unqualified. If the substitute is unqualified and has served for more than two weeks, the attention of the Board of Management is drawn to the requirement to secure the services of a qualified substitute, particularly in view of the number of qualified teachers at present available for employment. If an unqualified substitute continues to be employed by a school for a prolonged period further reminders are sent by the Department to the Board of Management.

In the course of an audit of substitute teachers’ pay it was noted that unqualified teachers were employed by Boards of Management for 30 per cent of the substitute teaching days paid for in 1988. It was also noted that unqualified teachers were employed by some schools for long unbroken periods even though the Department had issued several reminders to the Boards of Management of the schools concerned; one case was noted where an unqualified teacher was employed continuously between September 1986 and November 1988 despite the Department having issued 14 reminders.

As expenditure of £13.5 million was incurred in 1986 and 1987 and £6.8 million in 1988 on the training of primary teachers I sought the observations of the Accounting Officer as to the adequacy of Departmental arrangements for ensuring that qualified teachers are employed as substitutes where possible so that the educational system will derive the maximum possible benefit from such expenditure. I also sought information as to the number of qualified teachers who are unemployed and available for substitute teaching.

The Accounting Officer informed me that, as payment is made in arrears in respect of substitute service, it is not open to the Department, under existing arrangements, to take any action against Boards of Management which persist in employing unqualified substitutes.

He furnished me with details of the number of substitute days paid for by the Department in 1988 which showed that the greatest number of untrained substitutes were employed where teachers were absent owing to illness and where the absences would, for the most part, probably be for brief periods and unforeseeable. However, the information supplied also showed that where teachers were absent on maternity leave, unqualified substitutes were employed for some 8,734 days out of a total of 54,277.

The Accounting Officer stated that of the 7,180 teachers who qualified in the 1980-1988 period, 6,080 got permanent or temporary posts while 1,100 had got no post and in theory were available for substitute work. However, the Department had no way of quantifying the extent to which this pool had been diminished by factors such as emigration or illness. Furthermore, the figures for permanent/temporary employment relate to the first such apppointment of a teacher but some of those whose first appointment was temporary might have rejoined the ranks of those teachers available for substitute work on the cessation of the temporary employment and it was not possible to give figures for these without intensive research into each individual teacher’s employment record in primary schools. Additional qualified teachers could also become available for substitute work where teachers who gave up permanent teaching posts at some stage wished to reenter the profession, but found it difficult to gain permanent or temporary employment, while others might wish to teach on an occasional basis only.

The Accounting Officer also stated that the Department has no information on the geographical spread of qualified unemployed teachers and, accordingly, has no way of verifying whether qualified teachers may have been available for substitute work in cases where unqualified substitutes were employed.

Mr. McDonnell.—The basic point I am making in this very long paragraph is that unqualified substitute teachers were being employed by primary schools although there did seem to be an adequate supply of qualified teachers whose training had been provided at substantial cost to the State. As I saw it, as a consequence, the added value — that is to say — the expertise acquired through their professional training was not being made use of so you could in a way say that the thrust of this paragraph is a value for money one. The Department recognise, and I suppose it is understandable, that for unforeseen and short periods of absence, it may not always be possible or practicable to meet the requirement that you should have a qualified substitute teacher. But there was some evidence to show that even for what would be foreseeable absence, for instance, maternity leave, the Department’s rules were being flouted to a significant extent. The Department were fully aware of what was happening and issued the standard reminders and as the Accounting Officer has said, there is not a lot else they can do under existing arrangements. However, he did feel that the position was not quite as bad as the statistics might suggest because he was of the opinion that if unqualified teachers were generally being employed where qualified teachers were available their organisation, the INTO, would have made formal complaints and they had not done so. It is interesting to know that in 1989, the percentage of substitute teaching days which were filled by unqualified teachers was down to 17 per cent from the 30 per cent in 1988 which I mentioned there. There has been an improvement to that extent though I do not know what that might be attributable to.

Chairman.—The Department’s rules for primary schools state that substitutes should be qualified primary teachers. What is an unqualified primary teacher?

Mr. Lindsay.—I think it is anyone who has not the full qualifications from the teacher training college. A person with any qualification below that or even someone with a degree would not be a fully qualified teacher in the national schools sense.

Chairman.—Could we have janitors standing in the classroom?

Mr. Lindsay.—No, you could rest assured that——

Chairman.—But where do you stop. How does one decide whether somebody should be there or should not be there?

Mr. Lindsay.—I think it should be stated that the unqualified teachers are in fact appointed by school managers and we must assume that they have the interests of the children at heart. Could I state the position as it is now and the changes that have taken place in the last two years to show that while the position — as the Comptroller and Auditor General pointed out — was quite correct in 1988, there is a significant change and then perhaps to mention to you the limits to which it has been possible to recruit qualified teachers as substitutes. Those figures might be helpful. As stated, the number of unqualified teachers was reduced from 30 per cent of teaching days in 1988, to 17 per cent in 1989. In addition, 90 per cent of unqualified teachers are employed for brief periods and at short notice and the situation in regard to maternity leave substitutes has reduced from 16 per cent to 4 per cent. As part of the efforts to achieve that, what we have actually done is to try and target schools which are, as it were, continuous offenders and we are following up those schools individually. The other factor I think is of relevance is that the 1987 HEA First Destination Report indicated that only 1.5 per cent of trained graduates were actually seeking employment. Then the final point that I think is of particular relevance here is that the pay of substitutes was not found attractive to qualified teachers in many cases. This particular situation has been brought to arbitration and the arbitrator’s award is pending.

I think the statement has been made that there is a significant increase in pay for substitute teachers to follow from the arbitrator’s award. Those factors together help to indicate that you will have incidents of the use of non-qualified teachers as substitutes but equally you could be assured that schools will not recruit people who are not capable of teaching even though they are not fully qualified.

Chairman.—In an effort to tease this out, I want to take you through this very long paragraph. A sum of £5.2 million was paid in 1988 for substitute teachers and 30 per cent of that — about £2.8 million — was paid to unqualified primary teachers. Would it be true to say that the Department use about 800 substitute primary teachers per day?

Mr. Lindsay.—Yes, there are about 800 in the system at any point in time.

Chairman.—It says in the paragraph that the INTO operated a substitute teacher placement service and they actually had teachers available at the time the system was using unqualified teachers. Obviously there are geo-graphical factors and so on but 30 per cent would indicate a very high mismatch during the period concerned, 1988.

Mr. Lindsay.—Yes. I think you would actually have to take into account that in many of the cases concerned, the engagement was for short periods. You can see that the situation, from the figures I have given, has improved immensely. I think you can also accept the fact that there was a panel there and that we are in continuous contact with the INTO in relation to the panel, which does give reassurance that it was not a question of people being available for appointment and not being appointed. That would certainly not be the position at all. If any case was brought to our attention by the INTO in relation to the panel, we would certainly have followed up closely in relation to it. We have a continuous dialogue with the schools and we are trying to cut out the type of cases that the Comptroller and Auditor General has mentioned — that is, where they are appointed for longish periods rather than for short-term substitution.

The other aspect of it is the question of the unattractiveness of substitution for many qualified teachers. That also is being addressed.

Chairman.—During the year in question, these people were paid £37 per day.

Mr. Lindsay.—Yes.

Chairman.—How much are they paid now?

Mr. Lindsay.—The arbitrator’s award is pending. It has been decided but it has not been made public yet.

Chairman.—It will be substantially up on that?

Mr. Lindsay.—That is what I believe.

Chairman.—What would you say to the description of these unqualified teachers as babysitters, which is how some of the INTO officials have described them in the past, particularly in relation to the year we are looking at here.

Mr. Lindsay.—I would not have thought that that was the opinion of the INTO at all. You may have individual members making statements like that but that would be a gross distortion. I can assure the Chairman that that would not be a correct picture.

Chairman.—You would say that even though they are unqualified, by and large they were people who were suitable to be in the classroom?

Mr. Lindsay.—Suitable people to be in the classroom but not as suitable obviously as fully qualified teachers. However, we can take it that people who are appointed serve an adequate purpose for the period in which they are teaching.

Chairman.—Was PAYE deducted from the substitute teachers?

Mr. Lindsay.—Of course, it would be deducted in the normal way.

Chairman.—Are you sure?

Mr. Lindsay.—I have no reason to doubt it.

Chairman.—I do doubt it and that is why I ask you.

Mr. McDonnell.—I do not know because the substitute would be paid by the board of management and I would not have any information on that.

Mr. Lindsay.—Could I give you a note about that, because there are a number of technicalities involved that I would like to deal with.

Mr. McDonnell.—I am told, Chairman, that what you said may be correct but I am not certain.

Chairman.—I think that there is some arrangement which results in a loss to the State because PAYE is not deducted. I am not certain of that, which is why I asked the question.

Mr. Lindsay.—It would be in relation to where they are appointed for short periods.

Chairman.—Is it not a fact that there was discussion between your Department and the church authorities regarding exemption from deducting PAYE in these cases?

Mr. Lindsay.—If you will allow me, Chairman, I will be very happy to give you a note about that, to give you a full picture.

Deputy Flood.—I notice that in one case an unqualified teacher was employed continuously between September 1986 and November 1988 and that the Department issued a total of 14 reminders. I presume these reminders were issued to the manager or to the board of management.

Mr. Lindsay.—That would be correct.

Deputy Flood.—I find it extraordinary that the Department of Education would issue, not one, two or three reminders but a total of 14 reminders, presumably extending over a period of 26 months. That is roughly one every two months. The board of management chose to completely ignore the reminders and yet draw from the Department payment for the substitute teacher through the board of management. Was there nobody in the Department who after, say, six reminders decided that they must do something about this rather than continue to issue reminders which probably were framed or phrased using the same language? I find that extraordinary and unacceptable from the pupils’ point of view.

Mr. Lindsay.—I accept the point the Deputy is making. That is exactly what we are doing. As I mentioned, we have stepped up our action in that regard and that is how we have achieved such an improvement in the situation. We are taking the type of action the Deputy has mentioned. We are following up individual schools and if there are delays in reporting we are getting in touch directly with the schools and generally this has led to the result I have outlined. As I have said, 90 per cent of unqualified people are employed for brief periods and are taken on at short notice.

Deputy Flood.—It would be the board of management who would give employment to an unqualified teacher?

Mr. Lindsay.—Yes.

Deputy Flood.—I welcome the percentage reduction on this issue, but does this not call into question the fundamental function and role of the board of management? After all, a board of management is largely locally based, comprising parents’ representatives, teachers and so on. How is it that a board of management in a primary school, acting in the best interests of the pupils at that school, could then decide to chose an unqualified teacher when it appears from the report that qualified teachers were available? I do not believe it is because they cannot recruit qualified teachers to substitute.

Mr. Lindsay.—The point I made is that it is not a question of boards of management going out of their way to recruit unqualified people. They would recruit qualified people if they were available. In general the reason they recruit unqualified people is that qualified people are not available. One of the factors has been that the remuneration was not attractive to qualified teachers. We would not want to pillory the management system generally because of some deficiencies in a few individual cases. I would be certain that, by and large, school managements are extremely responsible in terms of their attitude towards appointment of substitutes and that it would only be where a qualified teacher was not available that they would recruit an unqualified teacher.

Deputy Flood.—We are told that in the 1980-88 period 6,080 qualifying teachers got permanent or temporary posts and that 1,100 had got no posts. Therefore, in theory, a considerable number of these should have been available for temporary teaching. In our report here we have heard that some of the temporary substitutes were appointed for a fairly lengthy period. It would seem that the recruitment of those was not properly carried out and proper information provided to qualified teachers who would be looking for positions as substitute teachers. That is why I come back to the role of the board of management and the advisability of investigating the whole structure of the board of management operation in schools where a situation like this has arisen and where in one case which is highlighted in the report, extending over 26 months, 14 reminders were issued. If that is an example of the response of boards of management, we have a problem.

Mr. Lindsay.—That particular instance was exceptional but I would refer to the information we have with regard to the availability of graduates for employment. According to the HEA First Destination Report for 1987, only 1.5 per cent of graduates were seeking employment at that time. You do not have a large pool of people available for, or willing to take up, substitute work.

Deputy Flood.—I want to raise the question of the payment of substitute teachers. As this is done on an arrears basis, it weakens the hand of the Department. Are there any proposals to investigate this area where, since the Department are paying, they should be able to call the tune in a more forceful manner?

Mr. Lindsay.—If we were not making any progress that might be necessary, but the level of progress that has been made since 1987-88 would suggest that the measures we are taking are satisfactory and that if we continue on this path we will have achieved a very satisfactory result, we would hope, within the next couple of years. I do not think that addressing the management question is of relevance to this issue. We can address it without addressing the management question which is a separate issue.

Deputy Flood.—I appreciate that the trend is in the right direction and I accept that.

Deputy Taylor.—Are the rates of pay the same, regardless of whether a teacher is qualified or unqualified?

Mr. Lindsay.—There is somewhat of a difference, a slight difference, between the two, but that was one of the issues that were addressed under the arbitration award.

Deputy Taylor.—Would some of these unqualified teachers have been students?

Mr. Lindsay.—Perhaps the Deputy might clarify what he means by “student” in that respect.

Deputy Taylor.—Possibly a student teacher who was not yet qualified but who was studying to become a teacher and who had not yet finished his or her course.

Mr. Lindsay.—That could well be.

Deputy Taylor.—Have you had discussions recently with the INTO to try to liaise the teacher placement service, fine-tune it and make it rather more effective?

Mr. Lindsay.—We have continuous dialogue with the INTO on the question of placement because clearly it is a matter of great importance to them. In general, there is no great dissatisfaction in regard to the way in which the system is operating. In terms of what we are achieving now and what we hope to achieve in the future that would be part of the dialogue we have with the INTO.

Deputy Taylor.—Have you sent any directives to the school managements that they are to liaise with the INTO when they need a substitute teacher, to see if they would have anybody available on their placement service?

Mr. Lindsay.—We have not specifically in recent times, but certainly you can take it that all boards of management are fully aware of the INTO placement service.

Deputy Taylor.—But are they using it?

Mr. Lindsay.—I think we can say that in terms of what we are achieving, the placement service plays a part in achieving these improvements.

Deputy Taylor.—Would you consider it might be helpful, when you are next circulating the managements, to urge them that they should consult the INTO placement service before they take on substitute staff?

Mr. Lindsay.—I will certainly note that suggestion, which is quite a good one.

Chairman.—We can note this paragraph and move on to paragraph No. 37.

Paragraph 37 of the Report of the Comptroller and Auditor General reads:

VOTE 28 — FIRST-LEVEL EDUCATION.

Subhead K. — Building, Equipment and Furnishing of National Schools.

VOTE 29 — SECOND-LEVEL AND FURTHER EDUCATION.

Subhead N. — Second-level Schools-Building Grants and Capital Costs.

VOTE 30 — THIRD-LEVEL AND FURTHER EDUCATION.

Mr. N. Lindsay further examined.

Subhead 1.1. — Building Grants and Capital Costs of Regional and other Technical and Specialist Colleges under Vocational Education Committees.

Subhead 1.2. — An tÚdarás Um Ard-Oideachas — Building Grants and Capital Costs for Universities and Colleges and Designated Institutions of Higher Education (Grant-in-Aid).

The planning section of the Department assesses the pupil capacity to be provided in all new school buildings or permanent extensions approved by the Department. In doing so it has regard to the Department’s rationalisation programme to meet the demand for school places at all levels and also takes account of demographic trends as reflected in available statistics. It is presently forecast by the Department that, between 1987/88 and the year 2000, primary enrolments will fall by some 125,000 and secondary enrolments by some 36,000 while demand for entry to higher education will continue to increase.

In the course of audit it was noted that changes to the Department’s school building programme as originally planned had led to some projects on which expenditure had already been incurred being abandoned, modified or suspended. In this connection professional fees on fourteen primary school building projects totalling £371,304 were paid with the sanction of the Department of Finance and are noted in the Appropriation Account for Vote 28. I also noted on audit that fees totalling a further £320,049 had been paid since 1985 in respect of thirty-four other primary school building projects which had been abandoned, modified or suspended.

The Accounting Officer has supplied me with the following information regarding costs incurred on abandoned or suspended projects at 31 December 1988.

The Accounting Officer explained that in certain circumstances, mainly for social, economic and demographic reasons, projects had been abandoned but, where sites had been acquired, the total loss could not be determined until the sites had been disposed of. On the other hand, where building projects had only been suspended because of budgetary constraints the Accounting Officer stated that the costs incurred were not regarded as nugatory.

Professional fees to a total of £482,286 had been incurred up to 31 December 1988 on primary school projects which were subsequently modified. In regard to such modifications the Accounting Officer stated that these might arise from technical difficulties encountered during the planning or design process or where more economically advantageous and educationally desirable alternatives had been secured by the Department following local agreement to rationalisation. Although the Accounting Officer recognised that design modifications to planned building projects could sometimes be such that an essentially new project was being undertaken for which the original plans would be worthless, he considered that this would not represent the position for the school building projects, as much of the work undertaken by design teams in the original planning was also utilised for the modified plans. Therefore he did not regard the original design costs as nugatory and felt that it would be invidious to consider fee costs in isolation from the overall cost of the completed building project of which it was an integral part. In all such cases, the additional work and related fee payments had led to significant net savings on overall costs.

Mr. McDonnell.—Paragraph 37 deals with the abandonment, the modification or the suspension of building projects at all educational levels and the consequent, if I might call it, unproductive, or perhaps to some extent unproductive, nature of the expenditure incurred on the associated professional fees. One must draw a distinction between the categories because, for instance, in the case of abandoned projects obviously the State would derive no useful benefit from the fees incurred. In the case of modified projects, some use might be made of the plans and site inspection work and so on, depending on the extent of modification and, in the case of suspended projects, there might or might not be a loss depending on the subsequent decision to go ahead or not. You will see that it is very difficult, if not impossible, to quantify what one might term a loss in this area. Against this, of course, is the point made by the Accounting Officer and stated in the paragraph that the final overall cost of the individual modified projects would be significantly lower than that which would have been envisaged in the original plans by virtue of the fact that, say, having gone part of the way with a particular project, it was then found that more economically advantageous or educationally desirable alternatives could be adopted by the Department. I accept the point that it makes sense to go for the most cost-effective and suitable solution in each case and perhaps that does sometimes involve changing at some cost. What I am trying to get at is the extent to which the unproductive expenditure, if I may call it that, on fees may have been due to perhaps some shortcomings in planning procedures or perhaps inadequacies in the information available to the Department when it is forecasting needs, or perhaps the failure at the design stage to provide for, say, less expensive building costs. It is difficult to quantify but there may be an element of unproductive expenditure.

Chairman.—Would Mr. McDonnell take the Committee through the figures because there are different figures in the accounts. Costs incurred on abandoned and suspended projects at 31 December 1988 at primary, post-primary and third level was £5.9 million. In the accounts you have two sets of figures for fees. Would you reconcile those figures?

Mr. McDonnell.—In the first part of the paragraph I have referred to the figure £371,000 on fees in the case of primary projects which have been noted in the appropriation accounts, as you will see when we come to the Vote. There was a further £320,000 again on primary projects, which has not been noted. That has also been incurred on a further 34 primary projects. In the case of the primary projects, the total, taking those two figures, the £371,000 and the £320,000 on the suspended, modified or abandoned projects, is £691,353.

Chairman.—Is that just for professional fees?

Mr. McDonnell.—Yes, that is the total for 48 primary projects under the three headings of abandoned, modified or suspended. The information which the Accounting Officer gave me is in the table and if you take the figure of £209,067, for primary schools that referred only to abandoned or suspended projects. On the next page — I mentioned three categories, abandoned, suspended or modified and the figure he gave me for the modified projects is £482,286, so in regard to the amount for the three categories for primary — and it is simply a breakdown of the figures as the Accounting Officer gave them to me — if you take the £209,067 and the £482,286 you get the same total i.e. £691,353. My original breakdown was on the basis of what had been noted as a write-off and what had not yet been noted as a write-off.

Chairman.—On primary schools, then, there is a total expenditure of £691,353 in professional fees on 48 projects?

Mr. McDonnell.—On all three categories, abandoned, modified or suspended.

Chairman.—Right. The modified was £482,000.

Mr. McDonnell.—Correct.

Chairman.—The abandoned or suspended was £209,000.

Mr. McDonnell.—Correct.

Chairman.—The total then of £5.9 million for second and third level only includes abandoned or suspended projects, it does not include modified projects.

Mr. McDonnell.—No, Chairman. For both post-primary and third-level you have just figures for abandoned and suspended projects there in the table.

Chairman.—It is currently forecast by the Department that between 1987-88 and the year 2000, Mr. Lindsay, primary enrolments will fall by some 125,000 and secondary enrolments by some 36,000 while demand for entry to higher education will continue to increase. How has that affected these projects?

Mr. Lindsay.—Could I start with the most intimidating figure there, the £5.9 million. They are rightly shown as either abandoned or suspended. In the case of the third level, by and large it is a question of suspended and a number of them are now proceeding. For example, you are aware that the Tallaght RTC was a project that had been suspended and that is now going ahead. In addition, included in the £5.9 million there is the Bishop Street development which is now proceeding.

Chairman.—That is the DIT?

Mr. Lindsay.—Exactly, yes. There is also the Dublin City University development which is now proceeding. There are proposals for work at the National College of Art and Design which is included in that particular one as well.

Chairman.—Could you tell the Committee what has been incurred on suspended or abandoned projects which are not being taken up?

Mr. Lindsay.—If you take all of the £5.9 million, none of them has been abandoned. I can list them for you because I think the Comptroller and Auditor General was given details of them. They include the proposed regional technical colleges in Thurles, Castle bar, Blanchardstown, Dún Laoghaire, Bishop Street, the Dublin City University, the National College of Art and Design and the clinical science complex for Trinity College. None of those has been abandoned, but some of them have been suspended and we are looking at them in the context of overall development in third level.

Chairman.—Does that mean that we might have more expenditure on these under the heading of modified when the time comes, if and when the time comes?

Mr. Lindsay.—It will not necessarily even be modified. It may go ahead as originally planned, for example, the Tallaght RTC is going ahead as originally planned in phases but, nevertheless, as originally planned.

Chairman.—Given these figures that primary enrolment will fall by 125,000 and secondary by 36,000, have your Department given consideration to designing the buildings in such a way that, as the enrolments fall, schools can be used for community purposes, for instance, building in gymnasiums that could be used as common halls, community centres and so on?

Mr. Lindsay.—That would be an expensive process for us. We are trying to take into account, in our planning short-term and long-term needs. There has been a transformation since 1987 in our whole planning process in this area and this is really the reason why you have what the Comptroller and Auditor General has pointed out in relation to primary and post-primary projects. We are, in fact, at the post-primary level working on the basis of rationalisation of every centre and we are doing it on the basis that we will have to meet longer-term needs in long-term accommodation, but will have to meet short-term needs in short-term accommodation. We are using that strategy rather than, as I say, the more expensive one of catering in full-scale accommodation at this point in time for numbers that we know will not exist tenor 15 years from now. We are trying to map and plan the country generally at both primary and post-primary level. At the primary level a couple of years ago there was an additional strategy introduced for the provision of relatively low cost buildings to meet needs in modified form. That was one of the major reasons for the items that are referred to here in the Comptroller and Auditor General’s report. It was a new strategy for the provision of buildings and, both in terms of relatively low cost solutions and modified solutions, to meet what we saw as the longer term needs of the students.

Chairman.—We already have a problem in Dublin city, leaving aside accounting for a moment, where there are falling numbers attending schools, where some schools have threatened that the whole future of the school is in question, where schools have closed, where there is a bussing operation going on successfully by some schools, and there have been mergers of schools. At the same time you have been building schools not very far out the road in the county, obviously where they are needed, but the time will come when those schools will be in the same position as the schools in the inner city given the trend here in declining numbers. If that is the case, should you not, at the planning stage, build some community use into the school for when it is no longer required for education purposes, or even when it is being required for education purposes, maybe even for use in the evening time, may be in communities where there is very little infrastructure? Should that not be a consideration at this stage of design? Would it be cost-effective to do that?

Mr. Lindsay.—On the first aspect of it, we are not building schools now that will not be required down the line. We are taking the 30 per cent drop in enrolments into account in planning in all areas but that 30 per cent is a national average and it will vary from area to area. What we are building now will be required for the future. On the second aspect of it, you can certainly take it that in particular at post-primary level it is a strong policy of the Department that the facilities would be available for community use. This applies automatically for the community schools and the vocational schools. In addition we are requiring, in the case of all secondary schools, that there would be a commitment in relation to the availability of these facilities for community purposes. This would not only include the hall but all other facilities in the school. We have a positive and strong policy in relation to adult and community use of all post-primary facilities. There are somewhat different requirements at the primary level but certainly in the case of a hall at primary level it would be fairly commonplace for it to be made available for community use.

Chairman.—So on these particular projects, in event, we have spent £6 million without a brick being laid?

Mr. Lindsay.—I think that would be unfortunate and, I believe, a totally incorrect way to portray it.

Chairman.—Is it not a fact that many architects have got very substantial fees from the State for designing and redesigning these projects? We had the same situation in the past where prisons were designed and never built. Are not people getting very substantial fees for designing these and then the designs go on the shelf somewhere? Is that not a fair way of putting it? Is it not a fact that a brick has not been laid?

Mr. Lindsay.—What is the £6 million?

Chairman.—£5.9 million, almost £6 million. Costs incurred in abandoned on suspended projects.

Mr. Lindsay.—Wait a second, now. In fact, if you take the projects that were modified, the actual cost of those is now £4 million as against the £11 million for which they were originally being designed, so there is a net saving to the State of £7 million. We could have just gone ahead blindly building with an investment of £11 million on the basis that that was the way we started, that we had incurred expenses on those, but we did not. I believe we acted very sensibly and I think the Comptroller and Auditor General was kind enough to say — and the point is quite a good one — that you cannot look on a change of design as a loss as long as it is a net gain to the State and that is our perspective on it. We could not accept that for one moment. I have been a strong party to these changes and I do not believe for one second that other than on a very technical accounting basis you could determine that this was a loss.

Chairman.—Could you not look at it another way, Mr. Lindsay, and say to yourself that the original designs were not cost-effective and people were paid for those original designs?

Mr. Lindsay.—No, Chairman, you cannot say that. That would be — I am sorry if I am so insistent on this — a total misrepresentation of the position. You are aware that the birth rate changed in 1980. If you look at the trends in birth rates, that was the most extraordinary event in the history of this State. If you look at the upward movement of births up to 1980, no-one anticipated that. It took some years after 1980 for that to come through the system in any real sense. If you were arguing the position with regard to births in 1982 you would not have got anyone to believe that there was actually going to be a trend downward in the form it has taken. The change in our birth rate has been more significant than in any other developed country in the period of time in which that drop has taken place. Therefore planning went ahead in a certain context in which there was pressure for places. That changed — now what do you do? Do you start crying and saying “Well, we should not have done that”? No, what you do is you look again at your situation, you modify your approach with the primary objective of ensuring that the actual cost to the State is less. That is the point that we made in the reply. As far as we are concerned, it is the total cost of the investment that matters, not what might have been a net loss as against a total gain.

What you are talking about is, are you saving the State money by the perspective that you have adopted? I am sure mistakes are made in any building programme, but you can take it that the vast bulk of that was done in the context of the time. What we are doing and what we deserve credit for is that we are facing up to the realities of the situation, and it is a battle. Every single project that we modify involves us in a battle with local interests to tell them that they are not going to have 500 pupils, that they are only going to have 300 pupils, that, as a result, they are not going to get the school they would like to get but the school that will be required on the basis of 300 pupils.

I might add a futher point to that. We are actually having to say this to them in a context in which currently they might have more than 500 pupils. What they say to us is “You mean that you are only going to give us a school for 350 pupils?” What we are saying is “Yes and we are going to provide short-term accommodation to meet your immediate needs because we are planning for the next century”. I cannot honestly see in any sense, from the perspective of the State and the taxpayers’ money, that that is not a laudable approach to adopt.

Chairman.—I think that is a very fine answer. Mr. Lindsay.

Deputy Allen.—It is, but I do not agree with it because I think it oversimplifies the whole situation. I would cast the Chairman’s mind back to 1985 when the Committee on Public Expenditure of which I was a member at the time, looked at this very problem. It is a problem, as the Chairman said, that goes into the Department of Justice building prisons that it goes into education, that goes into the health services also — capital programmes. As a kick-off, could Mr. Lindsay give me the overall capital budget for 1988 for all programmes at first, second and third levels and the percentage of the capital programme that goes on professional fees before a brick is put upon a brick?

Mr. Lindsay.—It will vary from year to year, but if you want to know what would be the percentage of—

Deputy Allen.—Take 1988. What was the total capital programme and the percentage that went on professional fees?

Mr. Lindsay.—There is £64 million total capital expenditure in 1988 on building works. I am going to ask you, Deputy, if you do not mind, not to distort figures, please, because I can tell you——

Deputy Allen.—I have not distorted anything. I just asked a question.

Mr. Lindsay.—It would be very unfortunate. Let me explain what happens about professional fees.

Deputy Allen.—I have only asked one question so far and I will ask for explanations afterwards. It concerns the capital programme and the percentage that goes on professional fees. We will take it step by step, because we have to. This is one of the areas where there is a major waste of public moneys, and I really believe that. We will have to take it step by step.

Mr. Lindsay.—I have been involved in building since 1964 and I can certainly tell you that on any programme that I was involved in there was no waste either on fees——

Deputy Allen.—We will decide that.

Mr. Lindsay.—You could take it that, on average, fees amount to about 12.5 per cent. Approximately one-eighth of the total cost of building goes on fees.

Deputy Allen.—In relation to primary schools, could I ask why there has to be a different team of consultants, achitects and engineers for each project and who decides on the appointment of these consultants, architects, engineers, quantity surveyors?

Mr. Lindsay.—There are two types of primary schools built, one is which is called managers’ cases, where it is the responsibility of the manager who actually owns the site to put the building up with a State grant. In the case of so-called Ministers’ cases, that is, small schools, the design work was done by the Office of Public Works but is now assigned to the Department of Education, so you do have that distinction. In the case where there are major fees in question — that would be the managers’ cases, in which they are responsible for providing the school — the responsibility of the State is to provide a grant to the school authorities towards the cost of building that school.

Deputy Allen.—The first question I asked was not answered. Why do we have to have a different team of technical people for each project. For example — I am not trying to oversimplify it — why do we have to have one team of consultants for an eight classroom school in Dublin and have a different team of consultants paying one-eighth of the overall project for a similar type school in an urban area in Cork? I know there may be a difference in topography but in relation to the basic design, why has there to be a different team of consultants?

Mr. Lindsay.—I think the answer I gave was really the answer to that. It is a manager’s case and therefore it is the responsibility of the authorities of the area to provide the school. We provide a grant towards the cost.

Deputy Allen.—A very substantial sum?

Mr. Lindsay.—We pay a substantial amount, yes.

Deputy Allen.—What percentage?

Mr. Lindsay.—It can vary. You are probably aware that there are negotiations and it can vary anything from 70 per cent to 90 per cent.

Deputy Allen.—So the Department does not have a say in the appointment of that team?

Mr. Lindsay.—No.

Deputy Allen.—I think that is one area where there could be major savings in our capital programme, and I would suggest, Chairman, that there should be some co-ordination between different projects.

Mr. Lindsay.—Could I just mention that that will not arise in the future at all.

Deputy Allen.—We are talking about the past now, from which we will learn our lessons for the future then.

Mr. Lindsay.—We are not actually building any schools of that type. We are building relatively small extentions in accordance with standardised plans and low costs.

Deputy Allen.—Hopefully things will get better and we will be building again, say, in a year or two. For example, in situations where the Minister decides to put a school in a certain area and it is a Minister’s responsibility, again, getting back to the same question, why has there to be a different team of consultants for each project?

Mr. Lindsay.—First of all, it is a standard plan that is used, where it is a Minister’s case. There are standard plans for various types of two-room, three-room, four-room and five-room schools and it does not make much difference in terms of the additional consultants that you bring in, in terms of placing that school on the site, whether you have the same one or different ones. It is a standard design, the amount of use that you make of outside consultants is quite limited by and large in terms of placement and site and the particular site requirements.

Deputy Allen.—So, does the level of fees vary?

Mr. Lindsay.—Yes.

Deputy Allen.—I would submit that there is room for very substantial savings if there was a co-ordination of effort between different parishes, even, in relation to the appointment of consultants. I believe there should be more control from Government rather than having it doled out to the favourite son of the parish priest. However, we will get away from that.

Mr. Lindsay.—I think you should not really get away from it because we have done quite a lot of that. You are probably aware that the first community school programme was done in exactly the way you were saying. It was a network of community schools——

Deputy Allen.—We are talking about primary schools at the moment.

Mr. Lindsay.—I know, but in terms of the concept of it, the only difference you will have will be design fees because we have a strict control over the cost of building, and whether it is done by individual design teams or collectively you would still be subject to the same cost limit. There will be variation in fee levels on the basis of what you are saying; that is what emerges from it. You might pay 9 per cent fees as against 12½ per cent if you had a standard design.

Deputy Allen.—Surely in areas where there is a repeat of designs and planning there should be flexibility between the professional bodies and the Department, for example, professional bodies governing fees for architects and consulting engineers. They should not be allowed to dictate their level of fee to the Department. There should be room for flexibility.

Mr. Lindsay.—There is room for flexibility.

Deputy Allen.—Only within a very narrow band, between 9 and 12 per cent.

Mr. Lindsay.—Yes, but what we are saying is that if you have to employ an architect, a quantity surveyor, a structural engineer and a services engineer, a 9 per cent fee is quite a modest level of fee.

Deputy Allen.—In relation to planning, you referred to the changes in the birth rate in 1980, and yet for 1988 we still have substantial wastage, in my opinion. You did itemise a number of projects which are suspended at present and I will take one for example. It came under the heading of the clinical science Trinity College project which was the subject of a major investigation by the Committee Public Expenditure in 1985-86, namely, the Dublin Dental School. That was a project that went ahead without the proper research being done in relation to manpower requirements, but when the consultant’s report was published in relation to manpower requirements for dental education and showed that we did not need a new school, this project went ahead and moneys were spent in the planning and design of it. I would like to know what moneys have been spent, for example, on that project so far.

Mr. Lindsay.—I will certainly give you that figure but I am afraid the Deputy has his facts wrong. The jury is still out on the question of the need for the number of dentists.

Deputy Allen.—No. The Cooper & Lybrand study—

Mr. Lindsay.—The Cooper & Lybrand study was an extremely faulty, badly based study which was not accepted in other quarters.

Deputy Allen.—It was accepted by the Committee on Public Expenditure and by the Dáil, so it is a matter of opinion.

Mr. Lindsay.—No, not the Dáil.

Deputy Allen.—The report was submitted to the Dáil and it was a report published by the Committee on Public Expenditure. It is on the public records, Chairman.

Mr. Lindsay.—No, this study was commissioned by the Dental Council.

Deputy Allen.—No, I said that the contents of the report were accepted by the Committee on Public Expenditure and were taken into consideration when the Committee issued their recommendations in relation to the construction of the Dublin Dental School.

Mr. Lindsay.—What I am saying is that——

Deputy Allen.—It basically said that there was no need for a school of the size recommended.

Mr. Lindsay.—As I mentioned, that study was commissioned by the Dental Council. Discussion is still ensuing with regard to the number of dentists that would be required. There already has been a variation by the Department of Health in terms of the numbers stated in that report; what they are talking about now is somewhere in the range of 50 to 70 and the jury is still out with regard to whether it should be 50 or 70. Debate is still going on, and there has been no decision on that as yet. There are a number of Departments involved in it and the Higher Education Authority, so there will be a decision in due course with regard to whether a dental school and hospital is required in the Dublin area.

Deputy Allen.—Chairman, I would submit that what Mr. Lindsay is saying is incorrect. The only study done so far says that the figure could be as low as zero and a maximum of 45, and that is the only report on record at present. What we are talking about are different opinions.

Mr. Lindsay.—No, I am sorry, that was a report which has not been accepted by the concerned authorities. We are in touch with the Department of Health, who are advising us with regard to the number of dentists that would be required. There has been no decision yet on that particular issue.

Deputy Allen.—It was recommended by the Committee on Public Expenditure as a valid report and the findings of the Committee took the recommendations of the report and accepted them. I would like to know what moneys have been spent already.

Mr. Lindsay.—I have no problem in informing you of that, but as I say, your figures are incorrect with regard to the demand for dentists.

Deputy Allen.—I would say they are are not. It is on record.

Mr. Lindsay.—The actual site works expenditure so far was £0.5 million and design work, £1 million.

Deputy Allen.—The sum of £1.5 million. And the moneys spent on the acquisition of site?

Mr. Lindsay.—That is part of the overall complex for St. James’s Hospital, so I do not know what arrangement was come to with regard to that. The charge on us is £1.5 million.

Deputy Allen.—£1.5 million for design and planning?

Mr. Lindsay.—Actual site works. If you recall, when the new St. James’s building was going ahead, it was decided that they would actually have provision within their site works for the extension to include the dental hospital and school. Therefore there was a charge on the Department of Education Vote in relation to its share of the cost of the site works for St. James’s Hospital.

Deputy Allen.—At £1.5 million.

Mr. Lindsay.—No, that was the £0.5 million. The £1 million was for the design of the dental school and hospital. One thing that seems to be agreed by the Department of Health is that a dental hospital is required in the Dublin area.

Deputy Allen.—But we are talking about a school now.

Mr. Lindsay.—The clinical science complex includes a dental hospital and a school. So you are actually talking about two things there. At least one is necessary. There is no evidence as yet that the dental school is not required. There will be a decision taken by Government in due course on the basis of a submission that will be made to Government, but there is not yet a decision with regard to whether a dental school is required in the Dublin area.

Deputy Allen.—I would just say that Mr. Lindsay is confusing the situation by bringing in the element of the hospital. A hospital can exist without a school. They are not interdependent. I am dealing specifically with a school and what I am saying is that there was a major report done by the Committee on Public Expenditure which showed that decisions were made in relation to the spending of public moneys without proper manpower assessments being done, and I am sorry to see today that this whole thing is continuing.

Mr. Lindsay.—This just is not correct. There was an assessment made and there was a determination that the number of dentists required per annum would be 70. There was a study commissioned by the Dental Council which came out with what we believe was on the basis of faulty analysis an alternative conclusion. I have no vested interest in this in any respect. What I am doing is stating the up-to-date facts on the situation. There was a working group set up involving the Department of Health, the Higher Education Authority and ourselves. There is now a decision to be taken by the Department of Health from their perspective as regards the number of dentists that will be required. We are talking about a minimum requirement, as we understand it, of 50. We would have to ask ourselves whether, if it were 50, that would justify a dental school in the Dublin area. If, in fact, the number is greater than that it certainly would, but that decision has not yet been taken and, as the Government are awaiting a submission jointly between us on this issue, I could not accept the assumption that it is not required. This submission has not yet been made to Government.

Deputy Allen.—I think Mr. Lindsay is indicating that, before the new manpower report is made, we spent £1.5 million and that we may not require the school.

Mr. Lindsay.—On the basis of an analysis that was done at that time. If you take the requirements of dentists, there were other arguments brought in by the Cooper & Lybrand study, for example, the question of the use of auxiliaries——

Deputy Allen.—Quite legitimate ones.

Mr. Lindsay.—Yes, that is quite a legitimate one but it was not a factor that was adduced in the early eighties in terms of demand for dentists, nor is it yet proven that the use of auxiliaries will, in fact, lead to a reduction in the need for dentists, because that is another major issue that had to be addressed.

Deputy Allen.—There have been developments in dentistry since 1985 and 1986 which would lead people like myself to the conclusion that there is less need than anticipated — a maximum of 45. With the advent of the Fisher ceiling, with the employment of dental auxiliaries and dental hygienists, there is a diminishing need for fully trained dentists.

Mr. Lindsay.—Yes.

Deputy Allen.—The trend is the other way.

Mr. Lindsay.—It is outside my travels——

Deputy Allen.—The Accounting Officer was talking with authority earlier about 70, in fact, that figures are going from 40 to 70 and he said that the trend would be the other way.

Mr. Lindsay.—No.

Deputy Allen.—He faulted the national Dental Council’s report.

Mr. Lindsay.—I did not. What I said was——

Deputy Allen.—He said it was faulty.

Mr. Lindsay.—I said it was faulty because it came out with a zero, where, in fact——

Deputy Allen.—It said zero to 45.

Mr. Lindsay. — ——whereas the most recent figure that we have been given is a figure of 50. What I am saying is that what has yet to be decided is whether it should be 50 or more, or less for that matter.

Deputy Allen.—What is happening here, Chairman, is that there is a dental school already which was training anything between 35 and 45 and was told by the Department of Education to cut back on this capacity.

Mr. Lindsay.—That is an incorrect statement. The dental school in Cork was designed on the basis of having an output of 25, with an output of 45 supposed to be provided in the Dublin school. I am not faulting them on it, good luck to them. They went ahead and changed that 25 to 35.

Deputy Allen.—If it proved that they had the capacity to do it, why should they not be let do it.

Mr. Lindsay.—That is what I am saying, I am not faulting——

Deputy Allen.—We are talking about efficiency and output, and here you are saying that because they exceeded their quota — and proved that they are able to do it — they were cut back.

Chairman.—I think the record will show that this point has been teased out fairly well.

Deputy Allen.—It has not, Chairman, because I think that incorrect statements were made here today. I would like to refer to the major investigation done by the Committee on Public Expenditure in 1985 and 1986 which made definite recommendations in relation to that project, and I am only using that project as another example of appalling planning in the Department of Education and appalling wastage of public moneys. I am only using that as one example because Mr. Lindsay went on at length earlier explaining why projects had been suspended, modified and abandoned and gave us very good reasons for this happening. I am giving one specific case where evidence was there to show that a project should not have gone ahead but they ploughed ahead and wasted at least £1.5 million of public money.

Mr. Lindsay.—That is an extraordinary statement, Chairman, to say the evidence was there——

Deputy Allen.—The report is there. I lived with it for four months with the Committee on Public Expenditure, and there were other factors involved in that project. There was a question of quid pro quo with the dental school also in relation to land acquisition, which is in that report.

Chairman.—I am going to let Mr. Lindsay reply——

Deputy Allen.—The Committee should look at that report to see if there are any lessons to be learned from it and to see if the Department learned any lessons from that report.

Chairman.—I think you have made the point very strongly and I think Mr. Lindsay has replied. If Mr. Lindsay wants to make a further brief reply we will then leave this particular point.

Mr. Lindsay.—Just very briefly I want to say that the decision to go ahead with the dental school was done on the basis of a study that was undertaken under the auspices of the Higher Education Authority in the early eighties. That particular study showed a need for an output of 70 dentists, 25 in Cork, 45 in the Dublin area. The Cooper & Lybrand study commissioned by the Dental Council suggested to the contrary. The project was suspended as a result of that and doubt with regard to whether the number of 70 was correct, but the decision to go ahead initially was based on a study. Now a decision has to be taken in the light of the most up-to-date information with regard to whether it is needed or not. I am saying the jury is out with regard to whether it is required.

Deputy Allen.—It was obviously a very faulty study when most of our graduates are emigrating at the present time and a small majority are just returning to this country. We are educating dentists for emigration.

Chairman.—The point and the reply are on the record.

Deputy Dennehy.—I would not like to go away from this subject too quickly because we had quite a lengthy discussion on the recovery of £30,000 to £40,000 already. As Deputy Allen pointed out, due to a policy decision in 1983, 1984 or 1985, we have spent £1.5 million. That policy was changed in 1987 and everything put on hold because there were doubts about this. I welcomed that change at the time and I lobbied for that change because I thought that it was a scandalous decision to go ahead in Dublin. I would be worried about the way figures are trotted out, 25 in Cork and 45 in Dublin as though enough people could not be trained in Cork. I do not know why the split is there. Everyone of us who is involved in politics had been lobbied by the Dublin vested interest in the early eighties. We were told of the terrible condition of the building in Dublin, of the facilities, that something would have to be done and that it was not suitable for training, not suitable for what was being done there. My attitude is still the same. If it is not suitable a very minor extension in Cork will save a lot of public expenditure, a lot of waste of funding. I see absolutely no reason why we should not have one training school for this country. I take the point that we may need a hospital separately but it is chauvinism of the worst type to suggest that we must produce 45 in Dublin — or any given number in Dublin. We have enough facilities centralised in Dublin. We have to send for this that and the other. There is absolutely no reason why the single training school for dental surgery etc., should not be placed in Cork. It is a policy matter and the policy decision was taken in the early eighties.

Taking Deputy Allen’s point, it was a policy decision. He lived with it for four years. I am a member of the Southern Health Board and I totally disagreed with the decision when it was taken. I was not in Dáil Éireann at that time so I could not express my views here but I am expressing them now. I thought it was scandalous. I was delighted when we were notified of the change in 1987. I would lobby for a fairly minor extension in Cork. I am told by the people working there that it can facilitate certainly up to 50 with no difficulty and very minor changes. I know we would need to go more into orthodontics and other areas but I do think we would want to get the principle of establishing the centre in Cork for dental studies. It is a very powerful lobby that is working in Dublin, not in the educational field totally or in the health field but by way of a mixed grill of people, as it were, putting the pressure on. I would hope that the Minister of the day in both Education and Health will hold the line and will say: no, we are quite capable of sending our people from Dublin to Cork — for a very welcome change. I would strongly support the case of the Cork Dental School and hospital. I felt it was a bad decision and I am not depending on hindsight. I argued at the outset that if the building in Dublin was that dilapidated and that poor, it was really against the public interest to have anybody operating out of there. The land, the facilites and the personnel are available. UCC have set up a magnificent facility in working with the dental school. The co-ordination between themselves and the Southern Health Board has ensured that we are geared and ready to expand. That is the kind of thinking we need regardless of what figure we get for the requirement for dentists. We should have a policy decision that the centre for dental training will be in Cork. I accept totally that there will continue to be a need for a dental hospital in Dublin.

The final point which Deputy Allen mentioned is a key one. I would like to know the percentage of graduates from the dental schools who are employed and working either in private practice or in the public service. We are led to believe that there is a shortage of dentists on the one hand while on the other hand we are given figures for dentists emigrating. Could we mix the two together and get figures of the graduates employed in the Irish field?

Mr. Lindsay.—Again, just to clarify, the figures I threw out were not based on my opinion. All I was saying was that no decision has been taken on it and they were the kind of figures that were being bandied about. I do not have figures on dental outputs or dental requirements. That is a matter for the Department of Health and we are dependent on getting some information from them. As to whether dentists emigrate, it is said that the level of remuneration dentists get in Britain is so attractive that it has nothing to do with whether employment is available here. There has been much talk of the shortage of dentists within the public health system also. I do not have that information and the analysis is not being done by me. We are just waiting for a decision with regard to whether the dental hospital and dental school are required in the Dublin area.

Deputy Dennehy.—I accept that but could I just make the point on it because it is very significant. Regardless of the figure being quoted as the requirement — this is going to be a major factor in deciding whether to go ahead — I do not know how we are going to assess that. We could say the requirement to come out of the dental schools is 500 if 450 are to emigrate. There must be a relationship there. It is something we need to look at. We have had scandals in the past — wasted funds and so on. I do not want to be part of any such scandal. I welcome the trend towards an overall evaluation of the expenditure. The final sentence in that particular paragraph is the key one, on Vote 30: “In all cases the additional work and related fee payments have led to significant net savings on overall costs.” That is the kind of thinking we should have. Our job here is to ensure that public funds are spent in the best possible way and for the best return. Regardless of the number that seems to be required by any survey, because the number emigrating must be taken into account, we need to look at the principle of establishing one training centre.

Mr. Lindsay.—Could I just add, since some mention was made of Dublin of which I am a native, I have a feeling that Cork has an extremely strong lobby also.

Chairman.—I was just thinking that, too, Mr. Lindsay.

Deputy Allen.—Just in case that is misrepresented I would like to put on the record that if we need two training centres for the education of dentists we need two units of 25 each. The level and the scale of the Dublin Dental Hospital as planned is totally unwarranted. If the figure of 60 is produced by any future study the scale of the Dublin Dental Hospital as presently planned is too big and over-elaborate.

Mr. Lindsay.—That aspect of it has been addressed.

Deputy Allen.—The £1.5 million spent already in planning will need major modification because it is too grandiose, too elaborate, and what is required at best would be two 25 units. I would support Deputy Dennehy in saying that the capacity is in Cork already and I cannot see any justification for anything but an extension in Cork. There has been a major waste of public money already. This Committee should look at the report of a Dáil Committee which obviously has been ignored by the Department.

Mr. Lindsay.—I just cannot accept that. I wish you would not make that statement because I do not accept there has been a major waste. What I am saying is that the jury is out with regard to what, if anything, is going to go ahead in the Dublin area. If the verdict is that there is to be no such development, at that stage we can always say, “well, that should not have gone ahead”, but at this point I am not aware of major waste with regard to that project.

Deputy Allen.—If the jury is out we have already spent £1.5 million in planning.

Mr. Lindsay—Yes, which may in fact be used if we decide to go ahead with it.

Chairman.—I am bringing this discussion to a close.

Deputy Flood.—I just want to return to the school sector. It appears that in the development of the primary schools — reference has been made to the additional accommodation that may be needed as a temporary requirement — the design and the material content have left a lot be desired. There is a considerable number of schools — I can only speak about ones in the large urban areas, those which have been built in the last 10 to 15 years — which are falling to pieces. This is not to do with maintenance but with the main structure of the buildings. Windows are falling out, roofs are leaking substantially and the internal design is very poor. It appears that we are not getting value for money with regard to professional fees. It may be that the fees paid to consultants are in accordance with their particular association’s requirements and the set down scales that are generally accepted in the public and private sector. That is not the point. I am talking about getting value for money for fees paid. It would appear that the design of our primary schools and second-level schools has left a lot to be desired. Any parent, teacher, manager or member of a board of management who walks through such a newly constructed school built in the last 10 to 15 years will point out a considerable number of basic flaws in the design. It appears that if one compares one large primary school with another or one second-level school with another, as a design product one differs totally from the other. If we are paying fees to consultants are there no very fundamental basic rules that we try to impose on the design of a building? For example, I have seen schools where immediately inside the door which opens into the boys’ room, you have the washhand basin. It is on the wrong side. In other words, when you come in through the door, the first thing you do is bang off the washbasin. It is such a simple thing and any parent would say that it is a crazy design. Unfortunately, we have this type of situation in far too many of our schools. Then there is the material content. There has been nothing short of a scandal on this and I am not aiming at any particular Government or anything like that. I am saying that over 10 to 15 years, new schools have been built in my constituency and the roofs are caving in or leaking. Windows are falling out and are rotting. Electrical fittings are disintegrating. Floors are coming up to meet the students.

All these things suggest that there were some very serious problems with regard to the control of the building of schools. I am saying this is to show that taxpayers’ money is being wasted because now we have these huge maintenance costs facing us on a new building, which, if you were in the private sector, you would not be thinking about for 25 years. The question I am asking now in the context of this Committee’s work is whether we have learned from those undoubtedly major mistakes and what action are we taking to ensure that any future building going up in the primary sector, the second-level sector, or the third-level sector will be adequately supervised with regard to construction, and the material content. That is where the real crisis has arisen. All the fine new buildings were put up but simply did not withstand the test of time. I am talking about five, six, eight or ten years. I would like Mr. Lindsay’s assurance that in that area — because we are paying fees for this work to be done — we will get value for money in future. That is the point I wish to make in the context of this committee’s work.

Mr. Lindsay.—The Deputy paints rather a dire picture. I have a feeling that it is probably not that bad, though there are problems. There are two areas where problems arise in schools, at windows and roofs. Where timber windows were used, there is no doubt that after a certain number of years they have given problems. By and large, it is either aluminium or PVC that is attempted to be provided now, which would be long-lasting.

Deputy Flood.—We have that.

Mr. Lindsay.—Yes. In addition, with regard to the roofs, you are probably aware that in the seventies there was a wave of felt roofs. Starting with the summers of 1976 and 1977, these began to damage the roofs, and then subsequent unusual summers for Ireland have led to the conclusion that the roofs that were provided at that stage are not a satisfactory solution and there are various others — Trocal and so on — which are being used now and which hopefully will have a far better life. I think it is the specifications rather than the individual designs that cause the problems. I hope that the example you gave of the situation in the toilets is unusual. That is a fundamental error that is certainly not acceptable.

Chairman.—All right, Mr. Lindsay. I want to go back to the whole point of the paragraph. Whereas the point you make about savings on the cost of buildings by re-design is accepted, there has to be a reasonable suspicion that the money spent originally on these plans was spent on staid formulae or on over-elaborate plans and indeed that there was not as much foresight put into the planning at that stage as there is being put into it now. To that extent, there is a clear inference that there was wasteful expenditure at the design stage in the amount of money that has been spent.

Mr. Lindsay.—May I make a brief statement? I appreciate the point of view that you are expressing. I believe that the major factor in all of this was the change in demographic trends. That created a fundamental change in the thinking in terms of, as it were, the optimism of growth which extended up to the early eighties. If it were not for that, there would not be a note from the Comptroller and Auditor General on this point now, because all of this would not have arisen.

Chairman.—No, but we would have schools with big schoolrooms and they would continue to be built in the same manner as Deputy Flood has described, to the same sort of formulae. They would not have taken in the demographic trends that they have been forced to take into account because of not just a change in population numbers but in attitude to the spending of money.

Mr. Lindsay.—In terms of the spending of money, you could take it that in the midsixties the Department of Education were the group who actually pioneered the present system of cost-planning and analysis that is actually operational for public Departments generally now. They were the first group who introduced the concept of cost analysis, cost limits and area limits. I can certainly tell you from personal experience that there is no country in the world which operates a tighter cost control on building at post-primary level, the area with which I am particularly familiar. I was appointed as a consultant by OECD to go to a whole variety of European countries and their cost per student varied from twice to five times that of the Irish standards. You can take it that the nearest example to us was Britain and we are significantly below Britain in terms of the cost per student place provided at post-primary level.

Chairman.—On that reassurance, Mr. Lindsay, I think we will conclude the examination for today. We will have to return to the remaining paragraph later.

Deputy Allen.—I do not want to conclude at this stage because I believe there is a serious disagreement in relation to one particular example that I put forward as a case of bad planning. Certain statements were made which are not in accordance with the recommendations of the Committee on Public Expenditure. I would like this Committee to look at that report to see if the Department have learned anything from it.

Chairman.—We will note the paragraph for now and we will ask the clerk of the Committee to circulate the report to members and we will see what further consideration it needs at that stage.

The witness withdrew.

The Committee went into private session.