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APPENDIX 3
29 July 1994 Ms Una Connolly Clerk to the Committee of Public Accounts Leinster House Dublin 2 Dear Ms Connolly I refer to your letter dated 18 July 1994 concerning two recommendations of the Public Accounts Committee namely that (i) the feasibility of re-negotiating the level of fees already agreed with Counsel engaged at the Tribunal of Inquiry into the Beef Processing Industry should be considered and (ii) that the Department of Finance guidelines on future appointments of Counsel for Tribunals be modified to include provision for an inter-departmental group. As regards the possibility of re-negotiation, the Attorney General is of the opinion that there is no contractual or other legal basis for asking the Counsel concerned to return fees already paid to them or (where the fees have not yet been paid to them) to accept fees of less amount than the fees that have been agreed with them. Those fees were assessed by the Attorney General (and, in the case of the fees payable to Counsel for the Tribunal, by the Sole Member of the Tribunal also) as being of proper and appropriate amount having regard to the nature of the work. I understand that the Attorney General’s office has ascertained from the Costs Accounting Section of the Chief State Solicitor’s office that they have no doubt but that those fees would be allowed by the Taxing Masters if they were referred to them. In the event of the Tribunal directing, under section 6 of the Tribunals of Inquiry (Evidence) (Amendment) Act, 1979, the payment of the whole or part of a party’s costs by, for example, the State, the amount of those costs would be determined by the Taxing Master who would, in the ordinary way, take account of the nature and extent of the burden borne by the party in question. The Committee’s recommendation that the Department of Finance guidelines for future Tribunals be modified by the inclusion of a provision for an inter-departmental group to ensure maximum efficiency is being examined in conjunction with the office of the Attorney General. The conclusions of the Committee on the Report on comparative costs of Public Inquiries prepared by the Comptroller and Auditor General will be considered in this context.
P H Mullarkey Secretary
11 November 1994 Ms. Una Connolly, Clerk to the Committee, Committee of Public Accounts Leinster House, Dublin 2. Dear Ms. Connolly, At the meeting of the Public Accounts Committee on 13 October last Deputy T. Broughan T. D. asked whether anything in the nature of a cost/benefit analysis of the Beef Tribunal had been undertaken. I can confirm that, as I indicated at the time, a cost-benefit analysis as such has not been carried out. However, the light of the Deputy’s question I have had some investigation carried out in the Department. There are a number of difficulties which make it impossible to carry out a full cost/benefit analysis on a realistic basis. On the costs side, as you are aware, the costs awarded to parties represented at the Tribunal have yet to be settled. As regards benefits, the Report of the Tribunal (Chapter 25) contains a detailed account by Secretary Dowling of the ways in which the Department of Agriculture, Food and Forestry have tightened up their administration of schemes affecting the beef industry. While this process had commenced before the Tribunal was established, the measures taken after its establishment took full account of the evidence presented to the Tribunal. In addition, the Minister for Finance in his contribution to the Dáil debate on the Report of the Tribunal gave details of certain changes in the working practices of the Revenue Commissioners in recent years. These were introduced following a management review of the overall organisation of the Revenue and were designed to strengthen both Customs and anti-evasion activities. Although these changes did not stem directly from the Beef Tribunal, the evidence produced at the Tribunal is being taken into account by Revenue in its ongoing operations. Partly in response to the evidence of abuse in certain sectors as it emerged at the Tribunal, the Government have taken action to increase substantially the statutory powers available to the Revenue Commissioners. Furthermore, the administration of Export Credit Insurance has been changed since the Tribunal heard evidence on this operation. The State no longer provides cover for short term commercial, as distinct from political, risk. An Economic Review Group was established to advise the Minister for Tourism and Trade on the classification of countries according to the degree of political risk and to establish a ceiling on potential State liability. An overall exposure limit is set for each group of countries in the category to give an individual country limit. The exposure of the Exchequer to risk of loss has thus been significantly reduced. The changes involved in all three areas are considerable and constitute substantial improvements in administrative practice. It is believed that these changes are already contributing to the prevention of losses to the Exchequer and the EU. However, it will be appreciated that it is impossible to put a precise value on these savings - we cannot know what might have happened if things had remained unchanged. The Minister for Finance, in his contribution to the Dáil debate on the Tribunal Report, has already referred to the £4.1m. tax settlement offer from the Goodman Group which can be linked directly to the Tribunal investigations. Furthermore, there are ongoing additional annual payroll tax receipts from the Goodman Group due to the cessation of the practices highlighted in the Tribunal Report. In addition, payments of £120,000 have been agreed with the Revenue Commissioners in other cases and some further money is expected. There are a number of cases where EU payments to beef processors may be disallowed, although these are not yet settled. (Criminal charges are being processed in relation to some of these). To summarise, (i) the costs of the Tribunal will not be finalised until the legal cost awards are dealt with; (ii) major changes in administrative arrangements in the Department of Agriculture, Food and Forestry and the Revenue Commissioners and in relation to Export Credit were reinforced by the Tribunal investigations and these have undoubtedly resulted in savings for the Exchequer and will continue to do so. While it will never be possible to say just how great the benefits have been, it is relevant to note that the beef processing industry in the years 1990 - 1992 employed 4,500 to 6,000 people, sold an average of just under a quarter of a million tonnes of beef worth £560m into intervention per year, and beef and cattle exports were worth £700m. per year, not including EU export refunds of well over £100m. per year. These figures place the Tribunal findings in context and indicate the potential scale of savings of even a small percentage of these sums of money on an ongoing basis. Yours sincerely
P. H. Mullarkey Secretary |
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