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, 19 Iúil, 1990

Thursday, 19 July, 1990

The Committee met at 11 a.m.

Members Present:

DEPUTY G. MITCHELL in the chair

Mr. P. L. McDonnell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

VOTE 25 — CHARITABLE DONATIONS AND BEQUESTS.

Mrs. A. Doris called and examined.

Chairman.—This morning the committee will be examining Mrs. Antoinette Doris, Secretary, Charitable Donations and Bequests in her capacity as Accounting Officer for that Department on the audited accounts for 1988.

On the last occasion you were here we said we would spend a little more time this morning going through the question of the operations of the Charitable Donations and Bequests Vote. In the meantime you and the Comptroller and Auditor General’s Office have been in consultation and there is a report here before us.

I want to run down through the case as I understand it and perhaps you will confirm if it is so. I understand under section 58 of the 1961 Charities Act that the Probate Office should make an annual return to the commissioners giving an extract of the amounts left to charity in wills. I think it is a summary rather than an extract from each will. Would that be correct?

Mrs. Doris.—Yes.

Chairman.—In the sixties there were problems and instead of sending a summary the Probate Office sent the wills themselves and you could not deal with that because of the bulk of paper and staff shortages and it did not fulfil the statutory obligation.

Mrs. Doris.—More or less.

Chairman.—I understand since then staff numbers have fallen even lower than they were at that time. I understand the Probate Office receive approximately 6,000 wills a year with a further 4,500 to 5,000 received by district offices. That would be a total of somewhere approaching 11,000 wills a year.

Mrs. Doris.—That is what we are told.

Chairman.—About 50 per cent of those would have charitable bequests in an average year.

Mrs. Doris.—Again, the Probate Office seems to think so.

Chairman.—Is there any way of knowing if that is the case?

Mrs. Doris.—Absolutely not.

Chairman.—What the committee are concerned about is that if you are not getting a summary of the wills of those who leave amounts to charity, you have no way of knowing whether the amounts left in wills to charity go to charity. Have you?

Mrs. Doris.—We have not, but on the other hand under section 52 of the 1961 Act as amended by section 16 of the 1973 Charities Act, executors mainly through their solicitors come directly to the charity commissioners as they are obliged to do. Between 200 and 250 people, a very small number, make application each year for exemption from publication so we get to know about those. The difficulty is the probates that should come from the Probate Office.

Chairman.—Let us suppose someone passes away in the morning, leaves £1,000 to the St. Vincent de Paul Society in his or her will, the executor of the will goes to probate, gets a grant of probate and then pockets the £1,000, how are the charity to get the money and how would you know whether this has or has not been done?

Mrs. Doris.—We would not under the present arrangement unless the executor had made application to the commissioners.

Chairman.—The executor is the one who has received the grant of probate in the first place.

Mrs. Doris.—Yes. We are dependent on the executors or the solicitor administering the estate.

Chairman.—The system of control has broken down and you are really depending on the honesty of the executor of any will or the administrator of an estate where a will did not exist. Would that be correct?

Mrs. Doris.—I think it is correct but it is not that it has broken down recently, this is a long, ongoing situation and I am not convinced that it ever worked. Going back even as far as the old Act of 1867 there were difficulties. The system is very cumbersome.

Chairman.—With 50 per cent of wills leaving money to charity, what sort of money would there be in any one year, an average year?

Mrs. Doris.—I have no idea.

Chairman.—So, we have no idea what sort of moneys may or may not be going to charity?

Mrs. Doris.—You would have to check the probates in the Probate Office to find that out. I could not even hazard a guess. Perhaps the Probate Officer could, because wills are read in the Probate Office anyway so whoever is reading them and checking them would come across this but we would not have any way of knowing.

Chairman.—Are you concerned about this?

Mrs. Doris.—Absolutely, and many years ago the commissioners wrote to the Probate Office about it and I went to see the Probate Officer and asked if anything could be done. He indicated that he had not got the staff to make the material available to us but he would speak to the President of the High Court about it and perhaps something could be done. I believe he has done that because I spoke to him recently and perhaps something can be arranged. We wrote to the Department of Justice and pointed out the deficiency and I understand the Secretary is looking into it but the commissioners are at the receiving end of the probate problem.

Chairman.—I accept that, but let me ask you about your responsibility as Accounting Officer. Suppose a charity finds that money that was left in a will has been misappropriated and they cannot recover it from the executor. Has it occurred to you that they may feel they have the right to pursue the State for negligence in not complying with the law and that there might therefore be the possibility that the State could be exposed to liability in these circumstances?

Mrs. Doris.—I would be surprised if that could possibly be the case but you would have to go to the High Court to find out, would you not? Anyone can bring an action. It would be a matter for the courts to decide. I do not think that this is necessarily relevant to the Vote of the Office of the Charity Commissioners.

Chairman.—Suppose they sue the commissioners for not ensuring that the law was complied with, or maybe it would be the Probate Office they would have to sue?

Mrs. Doris.—They would have to take legal advice as to whom they would have to sue.

Chairman.—Would you, as Accounting Officer, not be concerned that it might be you?

Mrs. Doris.—No.

Chairman.—The situation is very worrying.

Mrs. Doris.—I accept that, but what can be done about it at a practical level would have to be considered by all the parties concerned and not solely by the Charity Commissioners, and even, with respect, by this committee. I think the Probate Office, the Minister for Justice and his Department have a large involvement.

Chairman.—We can always call in the Secretary of the Department of Justice and ask him what is happening at his end but this is where the buck stops and it is up to us to ensure that the various parties involved comply with the Act. This is not happening, and it has not happened for a number of years. We will have to decide today how we can ensure that it does actually work.

Mrs. Doris.—Perhaps the Act needs to be amended or altered so as to modernise it. It is more or less taken directly from the 1867 Act and, as was said at a previous meeting, we have come a long way since then and perhaps changes are required.

Chairman.—We have an even older Act, the 1866 Act, which the Comptroller and Auditor General operates and we are having great difficulty in having that changed.

Deputy Taylor.—Is there a legal obligation on executors of wills, where charitable bequests are made, to publish them?

Mrs. Doris.—No, there is a legal obligation on them to apply to the commissioners for permission to either publish or to apply for exemption from publication, which is what the 200 to 250 that I mentioned earlier do.

Deputy Taylor.—When a person is appointed executor of a will which contains charitable legacies, there is a legal obligation, as I understand it, on him to do either of two things — to publish a notice in the papers announcing that the will has been made and that these charitable legacies have been left in it or to apply to the commissioners for exemption from the obligation to publish that advertisement. Is that right?

Mrs. Doris.—Yes, I think the actual wording is that there is a general exemption from publication unless the commissioners require it. Since the 1973 Act, the commissioners have interpreted that as being that if they are in receipt of a copy of the will and grant of probate and receipts from the charitable legatees with letters of awareness from charities who have a deferred contingent bequest they will grant exemption because then the charities are aware of the situation.

Deputy Taylor.—Will the executor be committing an offence if he does not comply with this legal obligation on him?

Mrs. Doris.—I believe he will be but I think the fine is minuscule.

Deputy Taylor.—How much is the fine?

Mrs. Doris.—I think £10 in some cases and £100 in others.

Deputy Taylor.—Therefore, the fine for not complying with the law by publishing the contents of a will which leaves £100,000 in charitable legacies is £10 or £100?

Mrs. Doris.—I would not like to be held to those figures but that is the type of fine we are talking about. Again, it is the old legislation.

Deputy Taylor.—Nonetheless, it is a criminal offence?

Mrs. Doris.—I would think so.

Deputy Taylor.—Has there ever been a prosecution for such an offence?

Mrs. Doris.—Not that I am aware of.

Deputy Taylor.—Who would be the moving party if there was to be a prosecution? Would it be your Department or the Director of Public Prosecutions?

Mrs. Doris.—I think it would be the commissioners through the Attorney General, who is the protector of charities. If the commissioners require an executor to do specific things and he does not the commissioners would then call upon the Attorney General.

Deputy Taylor.—To sum up the position this is really no different to the discussion we had on the matter on 30 November and nothing has changed since then.

Mrs. Doris.—The committee highlighted the situation and we, in turn, have discussed the matter with the Department of Justice on several occasions and more formally with the Probate Officer because he does not come within my jurisdiction or scope, so to speak.

Deputy Taylor.—Did the Probate Officer indicate that he intends to do anything about it?

Mrs. Doris.—He said he would speak again to the President of the High Court.

Deputy Taylor.—Have you heard anything from him since?

Mrs. Doris.—I have to confess that I spoke to him only very recently.

Deputy Taylor.—The failure of the executor to comply with the law is a criminal offence but the disregard shown for a whole branch of the law in operation means the system is being brought into disrepute. There is a system there — there is a procedure set up by law which makes it obligatory to publish the advertisement giving notice of charitable bequest or to seek exemption, the obligation of the Probate Officer to notify your Department who follow it up to secure the moneys to the charities and the provision for a prosecution, albeit for a small fine, but a criminal offence nonetheless — but it is not being used at all. The whole modus operandi is pushed to one side as though it did not exist. That is really what it amounts to.

Mrs. Doris.—It is not in operation.

Deputy Taylor.—Would it not be fair to say that it would be no major deal to get this system up and running with some semblance of order? I do not mind suggesting how this could be done for example, in addition to the 100 or so questions on the Inland Revenue return form executors have to fill in, there could be one box on the front for answering a very simple question. “If there are charitable legacies in the will put a tick in this box”. This would clarify the issue right away and if there was a tick in the box the Probate Officers who deal with these issues would photocopy the will and send it on to you. Would you agree that that would not require an enormous increase in staff in the Probate Office?

Mr. Doris.—This is where I have a difficulty. I discussed with the commissioners what could be done. The suggestions put forward were not dissimilar to what you have in mind but we felt that initially it is a matter for the Probate Office and it was not for the commissioners to advise the Probate Office. That is why the approach was that the Department of Justice——

Deputy Taylor.—The obligation to protect the interests of charities lies with you and not the Probate Office.

Mrs. Doris.—The real obligation to protect the interests of charities might even be the Attorney General’s. He, too, is aware of this.

Deputy Taylor.—Is it the responsibility of the Attorney General or the Commissioners of Charitable Donations?

Mrs. Doris.—The Attorney General is the protector of charities in the overall sense and the commissioners clearly have responsibilities under the Act. When the matter was discussed with the Probate Officer and the Department it was pointed out that the commissioners would be more than willing to help.

Deputy Taylor.—Have you discussed the matter with the Attorney General?

Mrs. Doris.—Not with the Attorney General himself; we deal with the Attorney General’s solicitor on various matters concerning the commissioners. He is more than aware of the deficiency in the system and he wrote to me some time ago about it.

Deputy Taylor.—You said that the Attorney General has a major role in the protection of charities along with yourselves. Do you not think it would be a good idea if you were to meet personally with the Attorney General to discuss the failures we all can see in the system as it is operating, or not operating, at present?

Mrs. Doris.—This might be more appropriate for the chairman or a deputation from the commissioners rather than——

Deputy Taylor.—Somebody from your office, I do not mind.

Mrs. Doris.—a lowly civil servant. I accept that something should be done and we will have to get together. We have taken the initiative and done quite a lot at our end but we must get some feedback.

Deputy Taylor.—I recall some ten to 15 years back seeing in the newspapers on a regular basis a couple of columns of advertisements giving notice of charitable donations. However, one rarely, if ever, sees them now.

Mrs. Doris.—I have not seen one.

Deputy Taylor.—You have not seen them?

Mrs. Doris.—No.

Deputy Taylor.—I recall that some years ago there were a number of columns of these advertisements in the newspapers.

Mrs. Doris.—I do not recall them but I have seen them in the office. I understand the reason they changed the provision obliging executives to publish these advertisements in the newspapers was because of the enormous expense involved. Sometimes these bequests are quite small. There may have been other reasons but I certainly recall the former chairman of the commissioners mentioning that it had got out of hand as publishing and newspapers was getting more and more expensive.

Deputy Taylor.—If you had additional staff in your office — I appreciate that with the level of staff you are constrained to at present this would not be possible — would it be possible to have one or two people checking the wills as they come in and picking out those wills that were appropriate to your Department.

Mrs. Doris.—Yes, but it would not stop there. That is the easy part. The wills would then have to be followed up and that can be very difficult. You would make contact with the beneficiaries but difficulties arise all the time because of wrong names and addresses on wills, family members may not necessarily be satisfied with the wills and they contest them, etc. It would bring its own problems which, again, may require even more staff. It is not just a question of a couple of officials checking through wills. That is the start. Either you put a proper system in place or——

Deputy Taylor.—As you say, it would only be a start but it might be a good start because they would pick out the wills for charity. At the very least a letter could go from your Department to an executor whose name and address could be taken from a will asking him what he, as executor of the will was going to do about the bequests to charities in the will? At that level it would make a major inroad because the executors would then know that the Charity Commissioners were on to them and were watching them. That would be no more than a letter to the executor. Even at that level, would that not be a major step forward?

Mrs. Doris.—It would be a step forward but I feel a more forceful system should be put in place. I am always fearful of starting a system that does not completely cover the situation and in turn breaks down.

Deputy Taylor.—Have you prepared any estimate of what additional staff you would reasonably require at a minimum to do this job in a satisfactory and efficient manner, assuming you were getting the co-operation needed from the Probate Office? If so, how many staff would you need and what would be the estimated cost involved?

Mrs. Doris.—We discussed this point at one time and we would require a minimum of four to five additional staff. It would depend on the grading and the cost would be in the region of £40,000 to £50,000.

Deputy Taylor.—For £40,000 or £50,000 you could make an attempt to tackle the problem.

Mrs. Doris.—I would like to think that it would be better than an attempt.

Deputy Taylor.—That would be a cheap price to pay for making a substantial attempt to tackle this problem.

Could I turn now to a different aspect of your work? We had some discussion on the last occasion about dormant funds. What dormant funds are there——

Chairman.—Before you pursue that point, I think Deputy Dennehy wants to come in on the matter we have been discussing.

Deputy Dennehy.—I was not present on the last occasion this issue was discussed. I am shocked at the level of non-compliance with the legislation and the total ignoring of several sections of the Act. There is a protector for charities at present but in so far as bequests and wills are concerned — whether we are talking about the Attorney General, the Commissioners or anybody else — the simple fact is that there is no protector for these as of now. We are talking about a possible 5,500 wills which leave money to charities and only about 200 to 250 people who are complying with the legislation. We will have to stay with this point for the moment. We cannot simply pick at this issue and leave it at that, which obviously was done in the past.

I have no great knowledge of the law but every time we start talking about costs they seem to spiral. I appreciate that the cost of employing four or five people for £40,000 or £50,000 is very small in terms of rectifying the position in relation to non-compliance with the Acts. Perhaps we could get a note on that aspect. Does Mrs. Doris think the Commissioners, the Department of Justice or the Attorney General should carry out the proceedings in that area? We need to get that point clarified first. I appreciate that much of the work in her own area, the recording of bequests, contact with personal representatives, checking receipts and so on, would be covered under that kind of money, but the question of proceedings is a different ball game altogether.

In relation to the question of the legislation — the Chairman has raised the question in the past in this regard and he is more au fait with the difficulties that exist — we should take the initiative in this area. We should follow up the Chairman’s suggestion and call in the Secretary of the Department of Justice on this matter because it appears that the responsibility is being passed on. Most of the original Act goes back to 1867 and needs to be looked at. There were amendments in 1961 and 1973 and it is surprising the legislation was not brought into the modern age at that stage. We need to look at the actual legislation covering this issue. However, that is only one side of it; obviously the legislation is very weak but the simple fact is that it is being totally ignored. We have to ask the question, who can take it on themselves to decide? Does the Probate Officer decide that something that is in law need not be followed through? If there is a shortage of staff, which would appear to go back to 1977 or 1978, that should be dealt with. It is not good enough to say that because somebody is down two members of staff that they can ignore legislation and put it aside. I find that suggestion shocking. We should get a note on the staffing required in the Commissioner’s office to do their side of the work. Deputy Taylor had several helpful suggestions that might help to modernise the requirements and get rid of some of the paperwork, and the Committee should follow up on those.

I take the Chairman’s point that as of now this Committee are the only protector of charities. It seems everybody else has simply abdicated and said that because they have no staff they cannot do anything about it, they cannot compel people to publish. There are about 5,500 potential wills with bequests in them to charities that the charities may know nothing of at all. We can pin down the areas there but I propose that we call in the Secretary of the Department of Justice to follow through on the points made and if we have to go beyond that to the Attorney General’s Office we should make a direct approach there rather than ask the commissioners to do so. This is totally unsatisfactory and somebody has to decide at this stage. According to the report this has gone on for up to 15 years. People have been saying they cannot cope and so on, so it is time to call a halt and get something done. I must congratulate the Chairman on raising this initially at the earlier meeting.

We must follow up the question of staffing and we need to clarify who would pursue the question of non-compliance with the Act. Is it the Department, the Attorney General or the commissioners under the law? We will certainly have to come back to this. This is the opening information on this but it is mind-boggling to say the least to see legislation being ignored by State Departments. We blame the general public but these are State Departments and officials who simply seem to say that because they have not enough staff they are ignoring existing legislation.

Deputy Flood.—I wish to continue on the same line. I hope the Accounting Officer will not find some of my questions repetitive but I need to be clear in my own mind. Will the Accounting Officer indicate at what point the procedures as laid down in the Act begin to fall down or be not adhered to?

Mrs. Doris.—At the stage where the Probate Office should send the particulars to the commissioners, at the initial stage.

Deputy Flood.—You indicated earlier that you had written to the Probate Officer presumably on this point?

Mrs. Doris.—Yes, but that was some years ago. Of recent times we wrote to the Secretary of the Department of Justice.

Deputy Flood.—When did you write to the Probate Officer?

Mrs. Doris.—It was in the late seventies, early eighties.

Deputy Flood.—What precisely were you trying to do?

Mrs. Doris.—It was at the time when these entire wills were collecting in the Charity Commissioners Office. It was then located in Baggot Street and the office was an old building, very charming but slightly damp. We are using one young lady to read through these wills and extract the information about charitable bequests. This was the duty of the Probate Office. The then chairman, the late Judge Kenny, felt that this was quite inappropriate, and that the Probate Office should be asked to carry out their duty properly and to send us the information as required in the Act. The matter was then taken up with the Probate Office.

Deputy Flood.—How did it happen that a member of your staff got involved in carrying out the functions of the Probate Office? Who took that decision?

Mrs. Doris.—I am only told, I do not really know. Apparently the Probate Office had a survey done in their office in the late sixties and the Probate Office together with the Department of Justice and, I am told, somebody from the commissioners’ office — perhaps the then Secretary, I do no know, I have no records of this — all agreed that this would be a suitable mechanism for dealing with probates and this would cut down the work of the Probate Office. It was a task to facilitate the Probate Office at the time.

Deputy Flood.—Therefore, in the late seventies you wrote to the Probate Office?

Mrs. Doris.—Yes, because these things had been collecting and while we had a young lady reading the wills, we had staff difficulties ourselves and they were not being followed up. I pointed this out to my chairman, that these wills were being read, collected but nothing much was happening after that. He said that the Probate Office would have to send the proper return and this would save a great deal of time and we would have to endeavour to do our duty then.

Deputy Flood.—Was that the subject of your correspondence with the Probate Office?

Mrs. Doris.—Yes, at the time.

Deputy Flood.—What was the response of the Probate Officer?

Mrs. Doris.—The Probate Officer indicated that because of staffing difficulties on his end he could not possibly change back to the earlier system, which was what we were asking him to do. He has not really changed from that since.

Deputy Flood.—What was your response to that?

Mrs. Doris.—Our response was that we were not prepared to accept the return in the form he was making it because we could not cope with it.

Deputy Flood.—Can we, therefore, infer from the response of the Probate Officer that it was at that point he was indicating that he was therefore unable to comply with legislation?

Mrs. Doris.—He indicated at that point that he would speak to the President of the High Court about it to see if something could be done.

Deputy Flood.—Was there any further response?

Mrs. Doris.—No.

Deputy Flood.—Did you say earlier that subsequent to that time either your office or the Probate Officer did speak to the President of the High Court on the matter?

Mrs. Doris.—I understand from the Probate Officer, because I have spoken to him on the telephone, that he has indeed mentioned it to the President.

Deputy Flood.—Can you explain — I am not familiar with the procedure — what precisely could the President of the High Court do about the problem we are now discussing. Would the High Court be able to suggest an appropriate procedure.

Mrs. Doris.—I am not sure but the Probate Officer considers the President of the High Court should be informed as he is in charge of the Administration of the High Court and its Offices.

Deputy Flood.—You explained to us that you have discussed the staffing situation in your office and that if you had an additional four or five staff which might cost £40,000 to £50,000 — although I think you are being a little bit conservative there — this would help. How can it help if the Probate Office continues apparently not to discharge their proper functions and responsibilities?

Mrs. Doris.—I may have picked it up incorrectly. Deputy Taylor was asking if the Probate Officer was able to do his part of the job, what we would require in turn to do our part. I was suggesting that I would hope that four or five staff might help us. I would still be concerned that the job would not be done completely.

Chairman.—Is the Probate Officer an official of the Department of Justice?

Mrs. Doris.—Yes.

Deputy Flood.—Therefore, you are saying that if the Probate Officer got his act together and was able to fulfil his statutory responsibilities properly and efficiently, then your office would have a major problem in coping?

Mrs. Doris.—Absolutely. I indicated at the last meeting here that I would not wish in any way to say that this is entirely a difficulty for the Probate Office. There would be an enormous difficulty in the Charity Commissioners’ Office.

Deputy Flood.—What are your staff numbers at the moment?

Mrs. Doris.—We have a staff of five and a porter. We have a young lady going on maternity leave who may be leaving in September. That is relevant because she has ten years’ experience.

Deputy Flood.—What is the maximum number?

Mrs. Doris.—Twelve. When I joined the office there were 12. There may have been more before that but that is ten or 12 years ago. We have, I feel, a 50 per cent reduction in staff.

Deputy Flood.—You have also indicated that you wrote to the Department of Justice.

Mrs. Doris.—I did.

Deputy Flood.—When did you do that?

Mrs. Doris—I wrote to the Department of Justice in March after the report became available from the Committee of Public Accounts.

Deputy Flood.—Was that the first time you had occasion to write to the Department of Justice on this?

Deputy Flood.—On this question, yes; on other matters of staffing, clearly no.

Deputy Flood.—What response did you receive?

Mrs. Doris.—I received an acknowledgment to the effect that the Secretary is looking into the matter.

Deputy Flood.—Have you felt inclined to write to the Department again?

Mrs. Doris.—Yes, I followed it up with several reminders.

Deputy Flood.—But no practical response?

Mrs. Doris.—No.

Deputy Flood.—What precisely did you say to the Department of Justice in your first letter?

Mrs. Doris.—I dealt with a number of matters because I spoke to the commissioners about the meeting here and they felt it was right and proper to write and report the proceedings to the Secretary of the Department which I did. I spoke about the probate situation in particular at length and about the accounts and the Comptroller and Auditor General’s functions in relation to the accounts procedures for the Charity Commissioners’ Office. I also wrote about the staffing difficulties and I sought help in terms of getting a professional or qualified accountant to at least check our work which is an area of concern to us and has been for many years. I wrote basically on four topics in one letter.

Deputy Flood.—Am I correct in assuming that you act here and report on behalf of the commissioners?

Mrs. Doris.—Yes, I am here as Secretary to the commissioners but my office, including me, come under the Department of Justice. I am not Secretary to the Department of anything.

Deputy Flood.—Am I, therefore, entitled, Chairman, to ask the Accounting Officer if the Commissioners have expressed views on this matter which we are now discussing?

Mrs. Doris.—I think the commissioners would not mind my saying that they have. They have expressed grave concern that they cannot carry out their functions and that is what they asked me to say to the Department, not necessarily only in this area but in this area in particular.

Deputy Flood.—Do they have to prepare an annual report?

Mrs. Doris.—Yes.

Deputy Flood.—Has the concern we have talked about been expressed in any of the annual reports recently?

Mrs. Doris.—No, not on this matter.

Deputy Flood.—Why not?

Mrs. Doris.—Clearly it might be appropriate to do so now. They expressed concern about a matter that they are very anxious to do something about which they see as of major importance and that is the increase of their cy pres jurisdiction.

Deputy Flood.—Finally on this matter, can we therefore assume that somewhere in the handling of all this, financial losses of some kind occur to some charities and some beneficiaries because of what would appear to be an appalling handling of the whole issue in the lack of efficiency, not saying in your Department but coming through particularly from the Probate Office?

Mrs. Doris.—One has to say it is a possibility. The difficulty is we do not know. This was the Deputy’s original point.

Deputy Flood.—Chairman, can we, through the Accounting Officer, ask the commissioners to indicate to us if as commissioners, because they fulfil a very important statutory role in this, voluntary and all as it is, they have an opinion about the question of possible financial losses? Is that not what we, as the Committee of Public Accounts, are about?

Chairman.—I think the only thing they could say to us is that if there are 5,000 or 6,000 wills and the administrators or executors of the wills are not complying with the regulations, there has to be reasonable suspicion that within 5,000 or 6,000 people there must be the possibility that some of the money may have gone astray. I do not think the commissioners would be in any better position to express a view on that than the Committee themselves would be. The only road for us to take is to recall the Accounting Officer together with the Accounting Officers for the Department of Justice and the Attorney General’s Vote and have all three present together with the Department of Finance. At this stage I want to ask Mr. Gallagher from the Department of Finance what he has to say about this problem because it seems that at both Charity Commissioners’ end and at the probate end it is a staffing problem which could be sorted out with a small number of staff.

Mr. Gallagher.—Let me make two points, the first, in relation to the Probate Office, the Probate Office is part of the High Court. We have had since the embargo reductions in the staff of the High Court but the situation stabilised some years ago following discussions with the President. The High Court since then, apart from the occurrence of normal vacancies and delays in recruitment which inevitably happened, has maintained its level of staff. The question of how staff are allocated between the different sections of the High Court and the Supreme Court which shares an office with it, is effectively a matter for one of the chief registrars who has responsibility for staffing in consultation with the Presidents of the respective courts. Effectively, the only demand we have had in recent times for staffing for the Probate Office has been for the filling of a particular post by promotion which has now been done.

Chairman.—You have no request for extra staff?

Mr. Gallgher.—We have no request for extra staff. In fairness to the people concerned, there may well be internal requests for staff within the office. You get this from time to time in various offices where somebody feels they are more put upon that other colleagues and that they should have more staff or are carrying an unfair share of the burden of cuts in their particular area. You get this kind of thing almost everywhere. It is a universal rule. We certainly have had no approaches for staffing in relation to the problem that has been mentioned here.

Deputy Flood.—I want to thank the Accounting Officer for the clarity of her answers to the questions I put and for her helpfulness.

Deputy Dennehy.—On the rather mundane question of costs, I appreciate that all this area is a public service, but is there any facility at all for the recovery of the costs of running your own Department and any others that would be involved with the processing of wills and so on? The public are paying. Is there any facility for recovery from the investment funds or from direct charges?

Mrs. Doris.—The commissioners do not charge any fees to charities at all.

Deputy Dennehy.—I appreciate that the commissioners work in a voluntary capacity but in the cost of staff and back-up?

Mrs. Doris.—That comes from the Vote account, Department of Finance.

Deputy Dennehy.—We have run into this in other places where we have said simply: pile on the staff and the taxpayer will pay. When we are considering new legislation we might look at this area also; hopefully, we will be able to recover the cost because it has been ignored in almost all legislation in the past. This is a very important matter when it comes to trying to control public expenditure.

May I join with Deputy Flood in saying thanks for the information we have been given to date. It is a new area for me and, while I am worried about it, we have benefited a lot from your own knowledge.

Deputy Taylor.—I join in expressing our thanks and appreciation to the Accounting Officer, who has given her replies in an extraordinarily frank manner, which I think was most helpful.

To clarify the point, of course, the losses we are talking about are not losses to public funds. There is no loss to public funds but to the charities who we know and our common sense tells us, must not be receiving legacies that have been left to them in wills in a large number of cases. That is our concern. It may, theoretically, be slightly outside our brief, but it is a matter of importance to us that a Department should run in a reasonably efficient manner and achieve their objectives. It is quite clear from what has emerged that the objective of the State is to try to secure charitable legacies for the charities to which they are left and to make sure that those legacies do not go astray and are not dissipated by other members or connections of the deceased’s family or whatever. It is an objective of the State to secure that, but quite clearly it has completely and utterly fallen down.

It seems to me also from what has been said that it could be rectified to a very large extent at a very minimal cost and that it would take very little in the Probate Office to identify the cases where charitable legacies have been left in wills. A minimal staff at minimal expense to the Charity Commissioners Office could carry out a very major monitoring operation there. We are not even talking about major expenditure at all. It could well be that millions of pounds are lost to important charities all around the country for want of the expenditure of a relatively trifling sum. That is not good enough and I wholly support your suggestion as to how we should proceed with this — by having a joint examination of the three interests concerned.

Chairman.—I wish to make one point clear is so far as the brief of the Committee is concerned. If there is negligence on the part of the State there is always the potential liability of a charity suing the State for not ensuring the law is complied with. That certainly would be a matter of concern to the Committee.

Are there any closing comments you would like to make, Mrs. Doris, have you been able to assimilate all the contributions this morning so far?

Mrs. Doris.—Thank you. I would like to make it clear that in no way do I wish to criticise the Probate Officer. Secondly, with regard to the letter and follow up to the Department of Justice to which I said I had not got a concrete reply, I think I overlooked one thing, our Chairman wrote to the Minister about staffing and the Minister very kindly lent us someone from the Department of Justice for the period from 11 July through to the end of September. That will not exactly solve our staffing problems, but we have someone on loan from the Department.

Chairman.—We should make it clear that the Committee has no criticism to make of the courts. It is a matter for the executive and the Accounting Officers within the executive. I suggest that what we should do at this particular point is to recall the Accounting Officer together with the Accounting Officer for the Department of Justice with responsibility for the Probate Vote, and the Accounting Officer for the Attorney General’s Office, in so far as there could be a State liability, and perhaps Mr. Gallagher and Mr. McSweeney might come particularly well briefed on this subject because I think it is something we want to resolve at the next meeting. If the various Departments involved can get together in the meantime and find some plan to resolve the problem and can advance that to the Committee it may not be necessary to go ahead with the meeting, but if there is not some solution, we will go ahead with the meeting and we will try to solve the problem in that way.

Would members be agreeable to that?

Deputy Rabbitte.—Is it in order for me to ask Mr. Gallagher whether the functioning of the Probate Office, outside of bequests to charities, is equally tardy?

Chairman.—It would be, but we would have to do it under the Vote for the Department of Justice. We are now dealing with the Vote for Charitable Donations and Bequests.

Deputy Rabbitte.—I take it from the physical inclination of the Chairman’s head that it is?

Chairman.—I think Deputy Taylor wanted to finish on some other point and we might remember that the Secretary of the Department of Energy is waiting.

Deputy Taylor.—Just a couple of short questions on some other aspects of the work of the commissioners. What is the value now of the trust fund you are administering?

Mrs. Doris.—At the moment we have a capital value of about £17.5 million.

Deputy Taylor.—How many individual trusts approximately would be constituted in that? Would it be a very large number?

Mrs. Doris.—Just over 2,000.

Deputy Taylor.—Taking into account, as you have said, that your staff have come down from 12 to six to five and going on to four, is it not plain as a pikestaff for us all to see that it is just impossible to administer 2,000 trust funds in addition to the other duties which are imposed upon you. Is that not asking too much of you all?

Mrs. Doris.—The moneys are taken care of in a unit trust. There is a manager of the trust fund so basically the moneys are taken care of outside the office but, as you say, a lot of internal work is required and this is where we have the difficulty. We have always had a problem in the Charity Commissioners Office in that it is looked upon in some ways probably by most people as a legal office and yet it has such large accounts side. I know the Commissioners have indicated this on many occasions and I feel very strongly that we need some staff with accounting expertise in the office. We have got an indication from the Minister for the Environment that his auditor hopes to attend every year to do the audit, that was a problem in that they were not able to attend every year to do the audit. They hope to do this, presuming their own staffing problems are resolved, and they have suggested that perhaps a survey of the accounting systems would be in order in the Commissioners’ Office and furthermore that they would have interim inspections of the office procedures. We also take care of about £4 million on deposit. Admittedly, it is on deposit in a bank but clearly there are books in the office and we in the office feel very vulnerable in this area.

Deputy Taylar.—Are five or six people taking care of all of this?

Mrs. Doris.—Yes, as well as the other work they have to do. I spoke to the newly appointed inspector of audits recently and I was somewhat taken aback when he suggested that they would charge both for the survey and any interim facilities afforded to us by his office. There would be a cost. We would have to depend on our friends from the Department of Finance to assist us.

Deputy Taylor.—Is an annual audit prepared or does anybody audit the income and expenditure in connection with the £17 million in unit trusts?

Mrs. Doris.—Yes. We have an outside auditor. We have a scheme established by the commissioners under their Acts to set up the Common Investment Fund in the first place, and there is a clause in that scheme making provision for the trustee of the fund to engage outside auditors to be selected by the commissioners as they have done. There is an annual audit done there. The problem is the deposit funds.

Deputy Taylor.—Are the dividends distributed to the relevant charities on a yearly basis?

Mrs. Doris.—For the unit trusts, Yes.

Deputy Taylor.—Are any administration charges made by the commissioners for this service?

Mrs. Doris.—No, not by the commissioners, but the charities are charged for being in the fund.

Deputy Taylor.—Who makes that charge?

Mrs. Doris.—The trustee of the fund.

Deputy Taylor.—Hill Samuel?

Mrs. Doris.—Yes.

Deputy Taylor.—Would it not be appropriate to have some nominal charge or administration change made by the Commissioners as a kind of appropriation-in-aid?

Mrs. Doris.—We have no facility for doing that. The Commissioners have no charges.

Deputy Taylor.—Are these trusts permanent and are they going to run on ad infinitum?

Mrs. Doris.—Yes.

Deputy Taylor.—They are never going to finish.

Mrs. Doris.—If they are they would be cy pres so they are permanent in that sense.

Deputy Taylor.—Why are the capital sums not being handed over to the charity? For example, if somebody leaves £10,000 to the St. Vincent de Paul, instead of investing the money through Hill Samuel with your unit trust why would the money not be given to the charity?

Mrs. Doris.—It possibly would now, but the moneys held by the commissioners are basically old moneys which came through the courts to the commissioners where somebody in a will particularly appointed trustees to take care of his funds. the trustees went to court, a scheme was settled and the funds were handed to the commissioners. This was what was asked for at the time. It does not happen frequently now.

Deputy Taylor.—In relation to the dormant fund, have you made any calculation of the amount of funds that are dormant.

Mrs. Doris.—We would have funds of under £500,000 lying dormant, representing about 200 charities. I am glad to say recently I disposed of two large ones so you could now say 180 charities are involved.

Deputy Taylor.—Representing approximately £500,000?

Mrs. Doris.—Yes.

Deputy Taylor.—Have you any plans for that money?

Mrs. Doris.—Every so often we try. It is one of these things that we try to do something about when we have time. I know I am delaying you, but this is where I fell that probate situation is more difficult than it may appear on the surface, because when you try to resurrect dormant charities it is very difficult and time consuming.

Deputy Taylor.—I do not want to delay the meeting any further but I think the question of the dormant funds should be seen to at some stage. I will leave it to you, Chairman, to decide how but the idea of £500,000 lying dormant ad infinitum does not make much sense in the public interest either.

Chairman.—Perhaps you might let the Committee have a note on the specific subject of dormant funds, the background and the current situation. Then we might decide how best to approach the matter.

Mrs. Doris.—We have done a lot of work and got rid of an enormous number of small dormant charities.

Chairman.—If you forward a note on that we might decide then to discuss the matter further with you at a later stage. I think we can note the Vote for now with the exception of the question which we are recalling and also the note on dormant funds. We may come back to that at some stage.

The witness withdrew.

VOTE 44 — ENERGY.

Mr. J. Loughrey called and examined.

Chairman.—The Committee of Public Accounts is continuing with the examination of Mr. John Loughrey, Secretary, Department of Energy, in his capacity as Accounting Officer for that Department on two Votes; the Energy Vote and the Forestry Vote, Votes Nos. 44 and 45 on the audited accounts of the Comptroller and Auditor General for the year ended 31 December 1988.

You are welcome, Mr. Loughrey. Thank you for coming in at such short notice. Are there any questions on pages 185 or 1986? Perhaps I could open by asking you about the Appropriations-in-Aid on page 186. I think the Estimate was for £1.39 million. In fact, you brought in £4.39 million. Why was there such a surplus of appropriation -in-aid or why was the original appropriation-in-aid so underestimated?

Mr. Loughrey.—The immediate explanation and the cast proportion of the increased appropriations-in-aid was due to the fact that promissory notes due to the Minister were paid over in an amount of £2 million. These promissory notes actually go back into the original shareholding the Minister had in Tara mines. The State had a 25 per cent equity interest. There was an initial expectation that the other shareholders, the promoters, would put up most of their equity in cash. In the event, they were going to put up only a limited amount of cash and the rest by means of guaranteed effectively subordinated debt. This appeared to dilute the Minister’s interests. As a quid pro quo these promissory notes were issued and they were eventually collected in that year in the amount of £2 million.

Chairman.—That accounts for £2 million out of the £3 million.

Mr. Loughrey.—Yes.

Chairman.—How is the other £1 million accounted for?

Mr. Loughrey.—There are a number of reasons. There were some payments due in 1987, I will come back to these in a moment, which were paid in 1988. In other words, the collection of due items were not included in the 1987 accounts as they might have been and obviously were collected in 1988.

Chairman.—You did not estimate that at the beginning of the year when you put in your estimate for appropriations-in-aid?

Mr. Loughrey.—Once again let me suggest that there is a timing problem on many of the items on the appropriations-in-aid for the Energy Vote. It is difficult to anticipate the volume of some of them — notably exploration licences, both offshore and mining exploration. Volume has to do a lot with timing of investment decisions and even market sentiment. What we tend to do is err on the conservative side in not anticipating levels which in the event might not mature. That approach leads to higher appropriations-in-aid in the outturn than on average. We tend to err on the side of conservatism when estimating income. There were licences which could not have been anticipated. Once again sales of data, and this is particularly on the petroleum exploration side, where much greater than anticipated. That is all grist to our mill. In a sense it is good news but in terms of an accurate estimate of appropriations-in-aid, for the year, clearly it meant that the outturn figure was greater than we had originally budgeted for.

Chairman.—The Department spent only £9.8 million gross. Three million pounds is a very significant proportion of that income, and not to know the Department are going to get it——

Mr. Loughrey.—The payment of the promissory notes dominated the proceedings. Once again, that could only be paid over when certain debts in Tara’s balance sheet had been eliminated. As you know from previous detailed examinations, this particular operation was low in shareholders’ funds, low in equity and very high in debt finance. Some of that debt finance which went well over $100 million at times was only advanced to the particular operation on the basis that it was senior finance. Until such time as this senior finance was paid off these promissory notes did not become payable. It was within the company’s discretion, based on their own cash flow and based on their ability, to decide when to pay off the senior debt. Once again, it made the timing of this particular receipt very tricky to estimate.

Chairman.—Was this in addition to the $50 million for the sale of the shareholding?

Mr. Loughrey.—Indeed, it was.

Chairman.—Are there any other promissory notes outstanding?

Mr. Loughrey.—No. That was full and final discharge of the understanding of the original dilution of the State’s 25 per cent. This dilution was not in terms of the equity holding but was just considered an appropriate offset as the shareholders did not go through with putting up cash as their 75 per cent proportion.

Chairman.—It is extraordinary not to know about such a percentage of your income in advance in any circumstances. With expenditure of £9.8 million and appropriations of £4.4 million and to have anticipated only £1.4 million income seems to imply a certain weakness in the forecasting ability of your Department.

Mr. Loughrey.—May I say in defence, the Department of Energy are a little different from most other Departments in the sense that they have very large responsibilities but a small budget. Most of the day-to-day operations in Energy are carried out either by the private sector or by major public enterprises. The fact that we had, unusually, this large amount coming in by way of promissory note was always known. It was a certain collectable but its timing was not at our discretion. In other words, the State was always going to collect but the timing was left to the discretion of the company. It does distort the appropriation-in-Aid, there is no denying that, but at no stage was there any question of risk to the Exchequer for this amount.

Chairman.—I have no doubt that, but there is the question of asking the Dáil to vote moneys that need not have necessarily been voted and then the Department were able to surrender £3.3 million. In relation to reference (e) on page 185 — minerals development — the Vote granted £178,000 but you used only £3,000 of that amount. There is a note saying that the process of refunding an estimated royalty overpayment remained incomplete at the year end. Could you, Sir, explain that to the Committee?

Mr. Loughrey.—We are back to the whole question of royalties and how they are collected. From the taxpayers’ point of view this was good news, albeit on a much smaller scale.

Chairman.—Does that mean we do not ever have to make the repayment?

Mr. Loughrey.—It does not. If royalties are related to taxation it means that you are always going to get time differences between the final corporate tax figure, and therefore if royalties are collected on an estimated basis there is going to be some fine tuning done when the Revenue Commissioners finally compute the actual tax liability of any particular mining company. In this case the State had collected moneys in advance over and above what effectively they were entitled to. In a sense it is good news; to a modest extent the Exchequer was being bankrolled in advance by a mining company which is a change of news, but ultimately we are due to pay these moneys back.

On the best information we had, we anticipated that the winding up of the final corporate taxation liability for this company would have come through in sufficient time and the liability effectively would have matured so we would have had to pay that money over. In the event, it was not completed in the year so the money we looked for on a bona fide basis from the Oireachtas did not have to be paid over, and, of course, like all surpluses we surrendered it to the Exchequer.

Chairman.—Was it paid since?

Mr. Loughrey.—No. This process of the Revenue Commissioners coming to an agreement with the company on their final taxation liability has not been completed.

Chairman.—Do you have an accountant in your Department?

Mr. Loughrey.—Naturally we have an accountant in the Department and we have qualified staff with accounting skills whether they are members of the Institute of Cost and Management Accountants or certified public accountants. We do not have a formal accountant in the sense that a private enterprise would have a qualified accountant for a particular position.

Chairman.—In other words are some of these accountants working in administrative jobs other than in the financial accounting area?

Mr. Loughrey.—Exactly.

Chairman.—Who does the financial accounting? Have you an accountant doing that?

Mr. Loughrey.—We have not yet been confronted with problems that we cannot dissect accurately in the Department. If we get into the realm of where we feel we need outside accounting advice, we are not too proud institutionally, to turn for help if we require it.

Chairman.—Almost every heading in your Vote was overestimated. Your income from appropriations-in-aid was grossly under estimated. Does that not show a weakness in your forecasting?

Mr. Loughrey.—Quite correctly, you have touched on the two major items. First, the timing of the promissory notes of £2 million; that was not at our discretion; second, the mineral development subhead (e); once again, this was not within our remit. I suggest even if we had a galaxy of FCAs in the Department all working on accounting, they could not have effected any particular outcome different from the one which in the event you have seen in the appropriation accounts for 1988. It was not a matter of expertise, but of the timing of payments and receipts, where we did not have direct frontline control on that timing.

Chairman.—In the case of the FEOGA western aid electrification, there was a major amount.

Mr. Loughrey.—On the FEOGA western aid electrification, we are once again in the realm of good news. If the Department can collect money over and above what we budgeted for, we are not slow to do so. In that particular instance, in 1988 the original regulation governing the western package was EC 1820/80; an EC regulation, and we sought and got agreement from Brussels to increase the reimbursement rate from 50 per cent to 70 per cent. At the same time the numbers of disadvantaged areas were increased and, once again, that led to higher receipts and we actually looked for advances from Brussels. Money in the hand that the Department of Energy get in advance and surrender to the Exchequer is well worthwhile. We are not slow to take these opportunities. What it did do was spoil our budgeted receipts which would have been settled in that instance 12 months earlier.

Chairman.—The note here is that demands for grants under the scheme are considerably less than anticipated.

Mr. Loughrey.—There was the change in policy in 1988. This was not just for rural electrification, it would have been for the whole western package and clearly that comes in the realm of at least two other Votes. This had been a very successful scheme; it had reached areas and applicants. I will not say that the market was saturated, but the pick-up was due to the changing of the status of the disadvantaged areas. Once again, in 1987 when these accounts were drawn up we could not have anticipated a successful outcome of the negotiations in Brussels late in 1988.

Chairman.—How many applications did you receive under this heading?

Mr. Loughrey.—From memory, approximately 5,800 but I will check that for you.

Chairman.—How many were you anticipating?

Mr. Loughrey.—The total from April 1981 when it started until 1988 was approximately 5,000. During 1988 we had 617 applications. We had budgeted for approximately 5,000 which would be roughly pro rata. What we did not anticipate was that in the last quarter of the year because of the extension, from the 13 western counties to all disadvantaged areas there would have been this, pick-up in demand.

Chairman.—Could you tell a city lad like myself what this western aid electrification was used for? Was it used for domestic purposes? Was it used for farming purposes?

Mr. Loughrey.—There are about three categories for what is directed. First of all, those who are eligible are bona fide farmers, and the definition of a bona fide farmer is one who has more than 50 per cent of income from farming and more than 50 per cent of his or her time spent on farming. All of these packages I suppose are in the broad realm of income redistribution and they were originally geared to smaller farmers in the west. If you did not have strict eligibility criteria you were going to get aid which includes State aid as well as EC aid to applicants who could well afford to improve their own electricity supply. What was it applied for? To answer your question directly, it was to get electricity supply in many cases to remote farms which could not afford it because the farm income could not support the capital costs of getting such a supply put into the farm. That is the first category.

Chairman.—The supply would not necessarily be to the home. It would be supplied for use on the farm.

Mr. Loughrey.—Yes, indeed. The second element was reinforcing existing supply because in some cases when rural electrification hit the original western package area, probably in the mid-fifties in many cases, it did not allow even for relatively small farmers the use of machinery, the use of milking machines and others. The reinforcement of existing supply comes at a very high cost where we have remote farmers in disadvantaged areas. Getting up from two phase to three phase electricity is also eligible.

Chairman.—For use in slatted houses and cow houses and any duty on the farm itself. I take it there are no farmhouses without electricity?

Mr. Loughrey.—In fact, there will be and are still some farmhouses without electricity. It would be the Minister’s and the Department’s objective to ensure the renewal and extension of the rural electrification scheme, on this occasion without EC support, so the State will be carrying it from now on and we must be doubly careful to get value for money. The decision to extend the scheme is precisely to get to areas, and there are still farmers without electricity supply in 1990. Our ambition would be to facilitate the elimination of that. How to divide them between voluntary and involuntary would be a very tricky exercies.

Chairman.—Do you know how many there are?

Mr. Loughrey.—If you push me I would say there could be as many as a range of 5,000 to 10,000 still without a proper supply of electricity. That is not to say that they are without electricity but the decision is to provide an electricity supply that would meet their now new requirements, even in small farms where they have to be run as a business.

Chairman.—You are talking about their business requirements.

Mr. Loughrey.—Yes.

Chairman.—What about their domestic requirements?

Mr. Loughrey.—That is a good question but I would be only in the realm of crystal-ball gazing in trying to answer that.

Chairman.—The original question was whether there are houses without electricity?

Mr. Loughrey.—There are.

Chairman.—How many of those?

Mr. Loughrey.—I do not have the figure with me. I can let you have a note. I stress that we have to distinguish between farm operations that would qualify for this scheme and rural houses that do not have electricity supply. Our target is bona fide farmers who cannot afford the capital costs of this rural electrification themselves. There will always be people living in rural areas but who may have a job, they may be rural dwellers, but they do not come into the eligible category. I can not give you an estimate how many that might be but we can certainly ask the ESB if they have an estimate of that.

Chairman.—Therefore, you do not know how many homes there are in the country that still do not have electricity.

Mr. Loughrey.—Not offhand, but I can find out. I can make inquiries and let you have a not on that.

Chairman.—Does it run to hundreds, is it less than a hundred, is it a couple of hundred?

Mr. Loughrey.—It is certainly much more than one hundred. I would say it is in the low thousands. Some of these may be rural dwellings put up on a phased basis where the introduction of, say running water and, ultimately, electricity is being done because it is being built on a budget. I do not know how many of these would be long outstanding existing dwellings there for some time without electricity. I would have to check with the ESB to see if they have a number of that.

Chairman.—Perhaps you would include in the note the number that are involuntarily without the service.

Mr. Loughrey.—I will do that.

Deputy Flood.—The note or subhead A.2 — Consultancy Services — is “Consultancy requirements on the gas development…” Is it technical consultancy?

Mr. Loughrey.—The breakdown is 60:25. In other words, effectively we had based inhouse but on a consultancy basis technical expertise which amounted to £60,000 and the £25,000 is strictly related to continuing consultancy work to ensure the highest possible standards in gas safety.

Deputy Flood.—Was it associated with safety?

Mr. Loughrey.—Absolutely.

Deputy Flood.—On subhead K.2 there is a substantial currency exchange loss on certain borrowings by Bord na Móna.

Mr. Loughrey.—Yes.

Deputy Flood.—Why certain borrowings? Why not all borrowings? Can you give us some detail on that? There is a very significant divergence there.

Mr. Loughrey.—This was a one-off loan that Bord na Móna were given permission by the Government to take on board following the disastrous harvest of 1985-86. The committee may recall that not only were they two dreadful years for agriculture but they were also the two worst production years in Bord na Móna’s history. When the then Government considered what they could do to alleviate some of the difficulties generally in the agriculture area, the committee will recall that low-interest rate Deutschemark loans were taken on board to help the agricultural sector. At the same time, that logic dictated that the Government should do the same thing for Bord na Móna. I stress that these were short-term borrowings in Deutschemarks and obviously there was an interest rate differential there which favoured Bord na Móna. Because of the adverse movements in the exchange rate with the Deutschemark, almost as an aside the Irish punt has maintained such a strong and steady position with the Deutschemark in the last two years but you will recall that there were some adverse movements in that time of 1986-87. The actual exchange loss incurred by Bord na Móna at that time was £325,000. The Department of Finance conveyed sanction that this amount could be paid from savings on the Department’s overall Vote; in other words, Bord na Móna was put in an advantageous position because of its difficulties to borrow Deutschemarks short-term. Because of the adverse exchange movements this advantage would have been eroded by the movements in exchange rates so, given the savings on the Vote in 1988, the Department of Finance agreed that some of these savings could be used as an offset not to penalise Bord na Móna further.

Deputy Flood.—What was the extent of the loan?

Mr. Loughrey.—It was the equivalent in DMs of £IR25 million.

Deputy Flood—Was there a condition attached to taking out that loan, that if there was an adverse exchange rate penalty, if you like, on Bord na Móna the Government would underwrite the cost of the adverse exchange rate?

Mr. Loughrey.—I would have to refer to the papers, but I know there was an implicit understanding that that was the case. If there was a formal condition to that extent I am not absolutely certain. I can certainly check it out, but I know it was, at the time, implicity agreed that Bord na Móna were allowed to have access to these funds in order to alleviate an almost chronic deficit position arising out of the 1985-86 disastrous years. By definition, there was that implicit agreement. I do not have the papers in front of me, but I would be surprised if it was not agreed explicitly as well.

Deputy Flood.—Was this the first year such a charge was underwritten by the Government?

Mr. Loughrey.—Yes.

Deputy Flood.—Is it likely to continue?

Mr. Loughrey.—No. The whole question of the Irish pound in the EMS and its sustained position means that the sort of large contingent liabilities on any borrower borrowing in the public sector in a foreign currency that would have have been there in the seventies or eighties, or if I may say so, in a different era in terms of our exchange rate policy, those are no longer there. I suspect — I cannot speak for the Department for Finance — that the Department for Finance and the Central Bank, quite correctly, would not countenance such a policy because implicit in such a policy is a vote of no confidence in your own ability to maintain your position in the EMS system. The short answer, therefore, is no. I would think it unlikely that any such guarantees would be given again in future.

Deputy Flood.—Why was not this amount picked up directly by Bord na Móna? Has it not gone through major structural change, presumably financial changes as well? Why has the taxpayer to pick up this amount?

Mr. Loughrey.—Undoubtedly Bord na Móna has gone through major changes institutionally, production wise and financially, notably in the last two years. It also has major problems which it freely admits and it is working closely with the Department of Energy to make sure that these problems are remedied as soon as possible. The specific reply to the Deputy’s question is that that £25 million was seen as an unusual response by Government to a very unusual set of circumstances. It was a stand alone arrangement and was compartmentalised away from the rest of the difficulties. In a sense, it was a transaction that was set apart, though you could well say that if Bord na Móna had such major difficulties, is this not just an extra small amount on top of that? I believe that would have been unfair because the spirit of the £25 million borowings was to help out in a very difficult set of circumstances and that was the spirit in which the exchange rate loss was covered.

Deputy Flood.—Was that £25 million borrowing for capital investment or for day-to-day expenditure?

Mr. Loughrey.—With a company such as Bord na Móna who effectively have no subscribed capital, sometimes the dividing line between capital and current becomes a little blurred. As the working capital requirements of Bord na Móna would, at that time, have been around that amount, it might have been equated for current purposes. However, I suspect they also had their normal working capital loans open to them at that stage. This cheaper money would have substituted for some of that working capital. I do not have their accounts for 1985, 1986 and 1987 in front of me but I suspect it was used both for current and for capital purposes.

Deputy Flood.—I would like to draw your attention to the fact that I would like to receive a note on the implications of that loan agreement and its future implications with regard to the State underwriting losses through variations in currency exchange. It would be of interest to us.

Chairman.—The Committee could ask for that note. Perhaps the Department of Finance might be the people to prepare that note.

Mr. Carey.—Certainly in relation to this particular issue, this was a once-off because of the exceptional problems the board had suffered in the two previous years. If you look at the Appropriation Account for the Department of Agriculture, the Agriculture Vote, you will find there were also payments made out in that year in respect of currency exchange guarantees that were given. This Bord na Móna guarantee was, to the best of my recollection, more or less tacked on to the end of the general agricultural scheme. I will certainly provide a note on the principle of this sort of thing and the implications of it.

Deputy Flood.—Subhead O— the Radiological Emergency Protection Plan — has an expenditure of £250,000. What exactly was that for?

Mr. Loughrey.—Obviously the Radiological Emergency Protection Plan — as I am sure the Committee well know already — was a response to the Chernobyl disaster. Quite frankly, the Chernobyl disaster found the whole of western Europe napping to some extent and the Irish response at that time was as least as good as anybody else’s but not wholly satisfactory. The Government took a decision in early 1988 that we would have a full national radiological emergency plan. I am pleased to report that the core of that plan is already in place and the test to date shows it works very satisfactorily. To reply directly to the Deputy’s question, the £250,000 was the sum paid for the completion of the alerting system, that is, a nationwide early warning system and that is fairly capital intensive. In other words, what we had to buy was specialised equipment and that was certainly part of it.

There is also an aggregate computer system which co-ordinates all the information coming through, so the now Nuclear Energy Board, soon to be the National Radiological Protection Institute, will be in a position to pull information together very rapidly indeed so it can advise the Government and the relevant authorities very quickly indeed in the event of an emergency.

There is also some specialised medical equipment. This comes once again with a fairly high price tag because specialised medical equipment in the area of radiation is not cheap. We think in our planning of the emergency plan it is being done in a quick but measured way and we would like to feel that the whole plan will come in at a cost of less than £1 million. It is excellent value for money. I suppose the best thing the Department could say is that it is almost like the story of a starting handle for a Rolls Royce; we hope we will never have to use it but if we do have to use it, it has already been tested on a preliminary basis and found to be working very well. What we will be doing in 1991 and 1992 is adding further refinements so that we already have a system in place but the system on completion will compare with anything else that any non-nuclear country has in western Europe.

Deputy Flood.—My final question relates to extra receipts payable to the Exchequer, Marathon royalties from the Kinsale gas field of £805,000. Was that what was totally due or is it part payment? Could you give us an explanation on that please?

Chairman.—Perhaps the note might tell you, Mr. Loughrey, what the total royalties received from there have been to date? You might answer that at the same time?

Mr. Loughrey.—The whole calculation of the well head royalties is bound up both with volumes of gas and attributable costs. The £805,000 is an amount that came in in 1988. There was a broadly similar figure which came in early 1989. I will provide a note for the committee on the whole question of royalties from Marathon on the Kinsale Head gas field. It does require some explanation for the simple reason that there are quite significant variations from year to year, although nominally the volumes taken off are the same. There are two aspects; one is changes in institutional arrangements, and notably the 1988 agreement, and secondly the whole question in movements in dollar and world price of energy. Perhaps the best thing I can do is to provide a note for the committee.

Chairman.—You do not have the figure so far?

Mr. Loughrey.—I do not.

Deputy Flood.—I appreciate the fact that we will get a note on it but will we have an opportunity to get into it and to discuss it and to see if everything is to our satisfaction with regard to royalty receipts? Would that be possible?

Chairman.—You did arrange for members to visit the Marathon oil rig just before Christmas and you even arranged to bring us back, Mr. Loughrey. Could I suggest that when we get the note from you, depending on the contents we might discuss the contents of that with you at a later date if the committee so wish.

Mr. Loughrey.—That presents no problem, Chairman. That can be done and I can make all the arrangements. There is no problem about that.

Deputy Rabbitte—I ask Mr. Loughrey to refresh my memory on why the Minister held promissory notes to the value of £2 million against Tara Mines?

Mr. Loughrey.—The original agreement was that the State would take an equity shareholding of 25 per cent, and once again we are going back to 1975. Tara Exploration and Development were to be the 75 per cent shareholders. The original understanding was that they were to put up the equivalent of £8 million, and I am working from memory, by way of shareholders funds. In the event they were only prepared to put up £1 million by way of cash and another £7 million by way of effectively subordinated debt, and once again I will check this in a minute. That was seen quite correctly by the Government and the State and by the then Department as not in the spirit of the original agreement and in those circumstances the State quite correctly said this is not the same quality of shareholders funds as we had anticipated. Shareholders who were not prepared to put up the full amount in cash as originally envisaged effectively could be diluting the other shareholders’ position so in those circumstances an agreement was worked out with the company that the State effectively would be compensated for this perceived dilution.

It should be stressed that this dilution was not in any sense a reduction of the equity holding. None of us was there at the time but I imagine it was perceived that the quality of the financing package for the operation had been diluted by the shareholders, so that the State should get a recognition that its 25 per cent in fact be restored to a position that it thought it was in. The system was drawn up whereby these promissory notes that were issued as part of the aggregate shareholding, the equivalent of £2 million, would be allocated to than Minister for Industry and Commerce, and in succession the Minister for Energy. That promissory note matured during the accounting period we are now examining.

The promissory notes were a from of quasi-capital if I may borrow a term from the financial services world. It meant effectively that the company was allowed to go and borrow either on a collateral basis or on a non-recourse basis large amounts of money to finance the mine.

The committee are well aware of the fact that the whole structure and financing of the Tara operation was very debt-intensive. Those debts at some stage were well over $100 million. The banks, and it was mainly Canadian banks that were bank rolling this operation in Tara, quite correctly from their point of view were not prepared to allow other people be paid off, notably shareholders, before they collected all the debt servicing due to them. This is the problem I touched upon earlier with the Chairman who raised quite correctly the question of how come we could not anticipate it. It is very difficult to read in advance what the cash flow in a mining operation will allow you to pay off by way of debt. It is so dependent on quarterly movements, even daily movements, in the lead/zinc price market. It was not anticipated that the senior debt would be paid off so soon and the company would be in a position to pay these promissory notes. That is the background to the payment of these moneys.

Deputy Rabbitte.—I thought I knew a lot about this subject, Mr. Loughrey, but the creative ingenuity of the mining moguls never ceases to stun me. Regarding the maturity of the notes in question do they coincide with the discharging of our equity stake, or do they just mature for other quite separate reasons?

Mr. Loughrey.—Totally separate. Had the sale not gone through it would have been seen as a stand-alone operation.

Deputy Rabbitte.—In regard to note No. 9, the disposal of properties at Avoca, County Wicklow, what were the properties involved?

Mr. Loughrey.—This was a disposal of the old spoilings at the tailings ponds at Avoca Mines. Getting back to the old adage, where there’s muck there brass; even in tailings ponds there is a considerable amount of minerals left from the original process. It has a market value and this was a disposal of that during the year.

Deputy Rabbitte.—What kind of situation is left there now after it has been cleaned up?

Mr. Loughrey.—I am glad you said “cleaned up” because I understand—I have not examined it in detail, I have just passed through it once—that between Wicklow County Council and the original Avoca Mines receiver for the most part they have done a very good job in reintergrating some of the scars of the mining operation there. In terms of the new company working the spoilings, in line with the Minister’s new terms as declared, strict attention will be paid to the environmental aspects of all such operations. We have now moved into a new era of environmental strictness in terms of mining in the Department. The point Deputy Rabbitte raised is vital. Too often in the past—once again there were different circumstances and different perceptions—mining companies left a mess behind them. The Deputy can take it that will not happen in the future. It will not be copperfastened by just exhortation or by regulation. If necessary, we will do it by means of a form of bonding so that we will not be left with the mess in future. That has happended too often in the past.

Deputy Rabbitte.—I am glad to hear that, Mr. Loughrey, and I certainly agree with you. When it comes to exhorting mining companies you might as well be doing something into the tailing ponds for example, one need only look at the situation in Tynagh. You said that in Avoca the situation is environmentally acceptable?

Mr. Loughrey.—In Avoca the job done between Wicklow County Council and the receiver is, I understand, a first-class job. The timing of the lease granted to the new operator at the spoil heaps in Avoca pre-dated the Minister’s new policy which is obviously incorporated into the new EC directive. As the Deputy knows, there are no exemptions for mining activities under the environmental impact assessments. There is no escaping that for any mining operation, no matter how small. That lease was granted in advance of this new era. You can take it that the Department of Energy to the best of their ability will ensure that the environmental dimension to the operation will be strictly monitored.

Deputy Rabbitte.—Who is the mining company against whom the debt of over £4,000 was written off in dead rent and royalties as a result of it going into liquidation?

Mr. Loughrey.—There were three write-offs during the year. The largest single write-off of a little over £18,000 was for Flair Resources (Ireland) Limited. They operated a lease at Ballingarry Mine from 1982 to 1984 and that was an unhappy experience. No royalties were received from the company during its mining activity and in June 1984 the operation ran into serious financial difficulties. The mine was closed peremptorily. In January 1985 Flair was put into receivership by Fóir Teoranta and subsequently, in June 1985, was put into liquidation. The information the receiver had already given us on the coal sales enabled us to see that the royalties outstanding were £18,000 but there were no funds available to the receiver, and subsequently the liquidator, to pay such royalties. The Department of Finance ultimately sanctioned the write-off in April 1988 after we had tried every possible way to see if there was any penny we could rescue, but in the event there was not. Realistically, the Department of Finance, after three years, agreed to sanction the write-off.

There were two other companies involved; the larger amount was for a write-off of a little over £4,000 in respect of Cliffbourn Mining Limited. It held three State mining leases in the Rossmore underground mine in County Laois in 1983 to 1986. The company went into liquidation in October 1986 and failed, despite requests, to supply the Department with details of its coal production. On the basis of information supplied by the liquidator, the Department retrospectively estimated royalties of £3,500 and dead rent of a further £500 that were owing and unpaid. As in all of these cases, the liquidator had no funds to meet this liability and the write-off a little over £4,000 had to be sanctioned as the debts were irrecoverable.

The third write-off was in respect of a company called Amble Resources (Ireland) Limited. Clearly, they were a company who felt they could do better because they took over the Rossmore Mine following the failure of Cliffbourn. This was done with the approval of both Cliffbourn and the Department in an attempt to rescue something. In many of these instances, while both rent and royalties are very important issues to the Department — and we do not take our eye off the ball — any possibility to extend employment or to maintain employment weighs far more heavily than royalties foregone. That was done in that spirit. They were not able to operate successfully and lasted only a few months. Jobs for another few months were certainly good value for the amount of thousands of pounds in royalties that were foregone but that is not to say to the committee that we are prepared to treat lightly the collection of debts owing to the Department. We pursued them vigorously and, in this case, with the liquidator. Where you have back-to-back failed enterprises, decisions are taken by the Department on the basis of whether anything can be done to salvage the jobs.

Deputy Dennehy.—I would like to ask Mr. Loughrey one of two things about the Cork area. A sum of $50 million has been lodged somewhere which has been designated for upgrading Whitegate Refinery but there seems to be no activity at all in the area. I expected we would have published the consultants’ report in March. Can we get an update from Mr. Loughrey as to what is happening? I thought we would be moving on by now.

Mr. Loughrey.—The Deputy has shown remarkable patience in putting his question in such a moderate way because he asked me a question akin to that some months ago. The Minister is equally disappointed that progress is not quicker. What we have at Whitegate is a valuable asset. The valuable asset comes in two ways. We have an efficient refinery, efficient, that is, in using out-of-date technology and we have a first class workforce there. There has not been one day lost through accident or any other way for that matter in the whole history of its operation, so we have a valuable asset. It is not something that we would trade lightly, so if there is going to be an upgrading which requires a link-up or a partnership with a third party, we want to make sure that it is done in the very best way.

International oil producing countries and international companies tend to be big bodies. As the Committee of Public Accounts will know very well, there are instances where big bodies do not move quickly. I think it is fair to say that the Minister and the Department have been disappointed that negotiations which we are still engaging in have not moved as quickly as we would want, and quite clearly as Deputy Dennehy would want. It is still one of the very top priorities of the Department, it is one that we review all the time. We push and push all the time and any time during our negotiations with potential partners the ball is always put in their court as quickly as possible. There have been delays but they are delays that are not attributable to the Minister for Energy or the Department of Energy but progress has not been as fast as we would wish.

The other question raised was that of the task force report. This was a very substantial document and it was a technical assessment of the combinations and permutations that could be grafted on to the whitegate operation, an assessment of our existing operation. If that were to be published in its full form the Department wanted to make sure that it did a very realistic assessment of our assets. I suppose one might say that when you do a realistic assessment and comprehensive assessment of your assets you actually report both good points and weak points. There is no doubt there is no organisation that does not have the odd wart, but if we publish that we weaken out negotiation position with potential partners. I think the Minister would be unhappy that we would adopt that approach. As of today I do not anticipate and I do not expect that report will be published.

Deputy Dennehy.—As one who has worked on the construction of the original refinery at Whitegate I am aware of the efficiency and the safety record. I would not claim to have had a big part in that but certainly I am aware of the staff there. Many people have a grave worry arising from the fact that the refinery has not been touched since 1959 in regard to uprating, and that should be a top priority. I emphasise again that the funding of £37 million minimum is available and we will be keeping a close eye on that to ensure that it does not go into any of these empty mines or anything like that. Is the actual uprating directly linked to an oil supply? Will that be part of the same deal?

Mr. Loughrey.—One of the things in the Department of Energy’s aggregate policy is security of supply. I think the Department would look very closely at any proposal that linked us to one single source of supply because by definition one is more vulnerable if there is one single source of supply. That is not to say that if the right deal which would work out best for the State and the taxpayer came along in that form we would dismiss it out of hand. A single source of supply, if I may put it this way, in terms of producer country very often tends to be a certain type of oil. In other words, Mexican oil is high in sulphur and quite viscous while North Sea oil is sweet and light and more valuable. We would tend to look for a solution that would not make us dependent on a single type of oil, so by definition almost we are looking at least to have a refinery that could take in supplies of oil from more than one source. That is a good bet from us in terms of security supply and it also leaves the company ultimately less vulnerable in terms of positioning themselves strategically in the market.

Deputy Dennehy.—Is Bantry still linked directly to this? There was the scheme of storage and piping to Whitegate and so on.

Mr. Loughrey.—As the Deputy from his Cork base will know very well, the planning permission application has been through Cork County Council. It is before An Bord Pleanála at the moment and we are hoping for a quick and good decision. A good decision as far as the Minister and his Department are concerned is one that would make sure that we did not tie the future prospects of the Whiddy terminal in any unnecessary way but at the same time would look after all local interests and misgivings. That is before An Bord Pleanála at present. A direct reply is that in approaching potential partners in the market Whiddy can be an intrinsic part of the solution or could be a stand alone oil storage facility. Once again, it comes down to if the offer is good for the Irish State and good for the Irish taxpayer that is the one the Minister will go for, but it could be either. There is no decision taken on that.

Deputy Dennehy.—To switch from oil to gas for a moment, Deputy Flood referred to Marathon funding and the exploration programme. You emphasised that the finance indicated was on the safety side, but I presume it relates to the overall exploration programme. Is the fact that a third less was spent on this an indication that the programme was wound down in some way?

Mr. Loughrey.—I am happy to inform the Deputy this is the 1990 programme. In 1988 we drilled only three wells, I say from memory, and it was not a good year. Companies have to plan wells in advance, so in other words very often the wells that mature in 1990 were planned, say, in 1988. We are having a good year this year in terms of exploration activity and we hope to maintain that next year. We have a great deal of expertise in-house. We have a petroleum affairs division. We have internationally recongnised petroleum geologists within the Department quite independent, and so in a sense 99 per cent of the work is done in-house. Sometimes there are reasons that we have to go to outside consultants and we do so where necessary, so it is not possible to read from the amount we spend on consultancy in this area whether activity is good or not. In short, activity has been good in 1990 and we are determined to maintain that through 1991 and future years.

Deputy Dennehy.—I am glad to hear that because we are anxious and have argued to establish Cork as the natural base for oil-gas exploration, treatment etc. We now have private individuals going into the area of training in, for example, drilling rigs. We have the Carey school and quite a few Nigerians are coming in and so on. I would like to see them getting every possible assistance from the Department, which I know they are getting, in the area of co-operation. It is a growth area and it is beneficial for the country.

I have one small, niggling question. There was a question last year in the Dáil regarding the issue but the rumours are about again, of transferring Bord Gáis headquarters to Dublin from its rightful location in Cork. Is there any truth in that? I appreciate it might be a policy decision but I am quite sure Mr. Loughrey would be aware of any such suggestion.

Mr. Loughrey.—There is no point in taking it from the Accounting Officer who is merely the head of the Department. What really counts is the Minister, and the Minister has made his position quite clear on that matter. Cork can sleep at night very comfortable in the thought that Bord Gáis Éireann headquarters is in Cork. Rumours can often be based on the fact that there is a certain amount of management activity in Dublin. By definition, in the period since 1985 effectively when Dublin Gas had to be turned around, when there was the unfortunate explosion, and with the emphasis on investment in the Dublin gas grid it was natural that the focus of management attention was to turn around Dublin Gas, but that does not in any way detract from the decision and the continuing, and maintained position that Bord Gáis Éireann is safe and well and in Cork.

Chairman.—That puts myself, Deputy Rabbitte and Deputy Flood in a very difficult position. We will have to go around now telling people the rumour is untrue.

Deputy Dennehy.—Maybe the rumour results from the fact that while we are sleeping happily in Cork aware of this knowledge the chief executive is sleeping happily in Dublin. That is part of the problem.

Chairman.—In relation to the Valoren programme the drawdown so far in the past two years has been £5.2 million and there is a potential of £19.4 million over five years available from the EC for aid in improving efficiency with energy. Have you any idea what the loss to Irish industry is from the inefficient use of energy?

Mr. Loughrey.—A whole range of estimates have been done in the Department and outside the Department for the Department by EOLAS over the years. Because they vary so dramatically depending on the standpoint —you could cite figures from 25 per cent down to 10 per cent; that is the range of figures we can often get—they are misleading. Sometimes in extrapolation people take a loss leader, so to speak. Some industry working quite clearly at a less efficient level of energy use or an intense level of energy use that is not justified because technology has moved on extrapolate aggregate savings from this particular experience or from a particular sector. One thing is certain; there are still considerable savings to be made. The committee will note in looking at the 1990 appropriation accounts when they are put before you that there is now a measured and increased effort on energy conservation and this effort is not driven by a sudden hike in world energy prices. I am not levelling any criticism on the past because it was an understandable reaction and not just in Ireland, but in the past following the 1973 and the 1979-81 crises Governments everywhere, not just in Ireland, immediately threw a great deal of resources into conservation, and two or three years later when worldwide energy prices— and notably the benchmark, the price of a barrel of oil—dropped to more realistic and longer term levels some of the ginger went out of the groups that were put in charge of energy conservation.

Referring to Valoren, this time, we are attempting now a more measured approach; when the price of energy is low, not panic measures but standing back and looking at the whole area of energy efficiency from two points of view. One is obviously the effectiveness, money saving and balance of payments point of view. That is still top of the list.

Chairman.—Have you any idea what Irish industry is losing from bad energy control?

Mr. Loughrey.—There is no reliable figure.

Chairman.—What would you think?

Mr. Loughrey.—I would be very disappointed if there was not at least a figure of £100 million to £200 million to be picked up in aggregate on energy saving with a sustained effort. Higher figures have been cited but they are ones that rely on the extrapolation of best available technology to every situation. More realistically, there are considerable savings to be made there.

Chairman.—Will your Department use this Valoren programme to try to advance the saving?

Mr. Loughrey.—Partly. “Valoren” is a bit of a misnomer. It is a worthwhile project but the EC have locked us into a straightjacket of making grant availability but to be applied to a limited number of circumstances. Quite frankly, as you have noted Chairman, the take-up is not perhaps as fast as is warranted. There are two answers to that. One is that the Valoren scheme as applied to Ireland is not as attractive. It is not just a matter of collecting grants. The second is, and I am sure the committee in one sense will be happy to hear this, just because EC finance is available we are not going to throw taxpayers’ money at any project in order to collect, say, a 40 per cent grant. The Department of Energy would not do that anyway and if we tried to, the Department of Finance would probably not let us do it so there is no guarantee that we may collect in full the £19 million available. That is something no doubt the committee will wish to return to.

Deputy Dennehy.—I appreciate that this programme may be confined to industry, but we should not lose sight of the fact that there is an enormous amount of money to be saved in the service areas. For instance the Regional Hospital in Cork did a programme and I think the savings were of the order of £60,000 a year because of an energy conservation programme. There are many areas like this in the public service. We have not emphasised enough the potential in that area and I think it could be looked at. I take Mr. Loughrey’s point that we tend to lose the head of steam when the price of fuel drops a bit. We should keep that pressure up.

Mr. Loughrey.—In a word, the Deputy’s point is particularly timely. Precisely, we will be putting an emphasis on public sector buildings and hospitals. It is on our 1990 schedule.

Chairman.—What do you hope to save by that?

Mr. Loughrey.—It is hard to say. What you do is as follows. You set up, like the Cork Regional Hospital, an example and you hope you can get other hospital administrators to follow suit. Sometimes that executive process is a long grind and it takes time. It is hard to say. It is not quite as easy as taking savings of £60,000 and multiplying by ten. The lead hospital is Cork Regional Hospital in this case and it takes time sometimes for the other hospitals to follow the example.

Chairman.—It is a very welcome development. We can conclude the examination at that. We will note the Energy Vote, if the committee agree. We still have the paragraph on Coillte and the Forestry Vote to go through but that should not take quite as long, so I suggest that on the next day we take you first. We will probably have two Accounting Officers on the day and we will dispose of that then. Thank you for bringing forward your meeting with the committee. You obliged us by coming in at short notice, which is appreciated. That concludes the business of the meeting.

The witness withdrew.

The committee adjourned.