Before I refer to some of the key elements of the 2014 Estimate, I will take this opportunity to bring the Committee up to date on some of the achievements in OPW under the Government’s Public Sector Reform agenda and outline some of the ambitious targets that have been set for the coming period.
Property Asset Management Reform
Property is the second highest administrative cost in the Public Service after pay and pensions. My Office has been given the considerable task by Government of rationalising the State's property portfolio in order to reduce that cost and to reflect the substantial fall in staffing numbers in the Public Service.
The publication of the Property Asset Management Delivery Plan - “Accommodating Change – Measuring Success” in July last year was the culmination of the work led by the Chairman of the OPW, as the Senior Responsible Owner for this area of property-related reform. I hope to shortly receive a report on the capacity of the OPW to deal with the new mandate given to it by the Government.
What we are now doing in the property space is genuinely reforming and new. By getting this right big savings can be obtained for the taxpayer. This plan will challenge the silo mentality that has built up over many years.
This new approach presents real opportunities for real savings by sharing assets, expertise and information across the public service.
From the State's perspective, we know that office accommodation is one area where significant savings can be made. Ministers have already given their full commitment to ensuring their Departments and agencies co-operate fully. The plan will include setting targets on space allocation per full time equivalent employee to be achieved by Departments.
The drive to optimise office space will be enhanced and facilitated, I believe, by statistical evidence setting out the full cost of accommodation borne by the State. The evidence will derive from the Key Performance Indicators arising from the application of a standardised approach to facilities management to be adopted by public property managers. This will provide a basis on which to assess building performance and identify where improvements in space and energy efficiency can be achieved.
In addition, a web-based mapping register of all State property is being developed for use by the public service as an information tool that will facilitate strategic decision-making.
On becoming the Minister with responsibility for the OPW, a primary target of mine was to reduce rental payments for Civil Service Accommodation below €100m by 2015. I’m glad to be able to inform the Committee that we are now two years ahead of target as last year the rent bill stood at €97.5m. From a peak of €131m in 2008 to a low of €97.5m last year - progress is being made as we are now back at 2002 levels of expenditure. Further progress can be made by adopting a whole of government approach.
For the information of the Committee, of the 155 closed Garda Stations closed 40 are being sold, 8 are being utilised by other state sector users and 13 have been handed over by way of a license to community groups. It's an example of using surplus properties in a different way.
Property Maintenance Shared Service
In the area of property maintenance OPW has now assumed greater responsibility for the provision of this shared service to Departments. The funding and works relating to building maintenance of State property to the value of almost €20m transferred to OPW in 2013 and are now managed and performed by OPW. This for the first time allows OPW to prioritise funding on a whole of Government basis in this area, and initiate a planned preventative maintenance works programme which in the medium term will produce savings, and more importantly, better care for the fabric of the State's buildings and an enhanced working environment.
As a result of centralising this service an estimated 100 staff in various departments, who were previously looking after maintenance transactions, are now freed up for other duties. In 2013, €19.5m was expended on this work and the Committee will see that a similar amount is available in 2014 of which €2m is ring-fenced to accelerate a preventative maintenance works programme on State owned buildings.
Staff
While these reform measures have been ongoing, staffing levels in OPW have reduced from an authorised number of 2,208 in 2008 to 1,620 in 2014. This is a reduction of 588 staff or about 25% over a six-year period. We have less staff, a vastly reduced capital budget, but have taken on new roles enhancing the existing shared service function traditionally performed by the OPW.
It's also worth highlighting to the Committee the scale of the reduction in our capital budget over the same six-year period. When the unitary payment for the National Convention Centre is taken out, our total capital budget across all sub heads is €80m. That’s down from €400m in 2008. It is quite a reduction.
In difficult times the OPW continues to demonstrate its commitment to training and work placement programmes. The graduate architect and engineer programmes enhance the professional development of the graduates, while making a significant contribution to the work of the Office. In addition, placements under the Job Bridge scheme are providing practical skills to the participants to enhance future employment prospects.
I'm pleased to inform the Committee that after an absence of some years, this year the OPW will reintroduce our apprenticeship programme. Some 20 places will be offered on the programme in areas such as stonemasonry and craft carpentry.
EU Presidency
Chairman, on the last occasion that Ireland had the EU Presidency in 2004 the total was €110 million. I'm pleased to inform the committee that the total cost for last year's EU Presidency came to €42 million. It's clear that the Government decision to centralise all conferences and events, some 245 in total, made a big difference in reducing costs. Dublin Castle and other historic properties under the care of the OPW, allied to the centralised event management service directed by the OPW, greatly helped in organising the most cost effective EU Presidency ever. The new state of the art conference facility in Dublin Castle is a tremendous asset for future events and conferences that the state needs.
2014 Estimates process
In relation to the 2014 Estimates before the committee the OPW have responsibility for two main programmes within Vote13, Flood Risk Management and Estate Portfolio Management. The National Procurement Service has been transferred to the Office of Government Procurement and has already been reviewed by your committee under Vote 41.
Flood Risk Management
One of the areas I haven't yet referred to is Flood Risk Management. I would like to address briefly the matter of the severe storms over the Christmas/New Year period and the resulting serious damage that was caused to public infrastructure. Initial estimates of the cost of the clean-up and the repair and restoration of public infrastructure were provided to the Government and are of the order of €65m. Some €41m, almost two thirds of the total estimate of €65m, arises from two counties, Clare and Galway, reflecting the severe impact of the storms along the west coast.
Local co-ordination and delivery of clean-up and restoration works is being led by the local authorities. The OPW, with responsibility for flood relief, has written to every local authority to say it will receive applications for funding to assist them in their work to repair the damage to coastal flood protection structures. Since 2009 OPW have provided €23.8m in funding to Local Authorities to carry out minor work schemes. The partnerships established with the Local Authorities, and the funding provided to them, is a key element in maximising the capacity of the overall programme with approximately 1,230 projects having been completed to date under the scheme.
Expenditure on capital flood relief works has been increased in recent years and we are now reaping the benefit of that investment in Dublin and in towns such as Clonmel, Kilkenny, Mallow and Fermoy where schemes have been or are being carried out. Nine major flood relief schemes were completed over the last two years under the Major Capital Programme in places such as Carlow, Clonmel, Mallow, Tullamore and in Dublin on the River Dodder (Tidal). 2014 will see the commencement of a further six major schemes at Templemore, Claregalway, Bandon, Skibbereen, Bray and in South Dublin with scheme completions at Fermoy, Ennis, Waterford Phase and the River Wad.
Almost €370m has been invested from 1995 to date in flood risk management measures which have protected 10,500 properties and delivered benefits estimated at over €1 billion in terms of damage and losses avoided. This is a very significant achievement by any measure.
This Government has committed €45m per annum for flood risk management and mitigation measures for the period 2012 - 2016 under its Medium Term Capital Investment Programme. Despite the fall-off in capital expenditure elsewhere, OPW have prioritised this area of spending and an amount in the order of €100m has been spent in 2012 and 2013, with the use of other savings achieved on the OPW Vote. €45m in capital expenditure has again been allocated in 2014.
We have to prioritise our spending to make sure that on cost benefit grounds the funding resolves the problem for the greatest number of people, communities and businesses up and down the country.
On coastal erosion we have to
take a much more holistic view. Coastal erosion is a natural occurrence and we have to make sure in our planning and development that we do not repeat the mistakes that have been made in the past and allow development in areas at risk of erosion.
It is also worth noting that in tandem with the management of flood risk this investment programme is heavily labour intensive and the investment will continue in future years to sustain significant employment numbers. Based on a Department of Finance Report on Labour Intensity and Infrastructure Investment, it is estimated that the amount of money expended on flood relief activities has sustained up to 700 direct jobs and 300 indirect jobs in the past two years.
Estate Portfolio Management
The Estate Portfolio Management programme is the largest of the two programmes with an allocation of €312m. This programmes has many distinct parts including €98m of rental payments and €50m of maintenance spend on which I have already referred to. Another significant part of the programme is Heritage Services involving the management of 760 National Monuments and 30 National Historic Properties, with a combined provision of 70 visitor facilities.
Heritage Services
We need to do things differently in the heritage space. Since coming to office I have got a communities initiative scheme up and running. While some 20 projects have community involvement now, there is potential for many more. The 'First Free Wednesday of the Month' initiative launched by me two years ago has helped to open up more of our great historical sites to the public. Visitor numbers are up 6% year on year. I recently looked for interest amongst the private sector to see if we could enter partnerships on our existing sites which might improve footfall while increasing employment opportunities. We had 42 expressions of interest with 13 serious proposals which are now being considered. Soon I will launch a new scheme to allow members of the public to use designated historical sites for civil ceremonies.
I secured agreement with the Department of Public Expenditure & Reform to reinvest additional receipts generated by the Heritage Services in OPW. As an initial step an additional €348,000 was generated in 2013 and provisionally allocated to OPW in the Revised Estimates for 2014 to allow it to be re-invested in the Heritage portfolio. This money will go to areas in most need and importantly where capacity has been identified to generate increased business and receipts. The direct re-investment of surplus receipts generated will create a strong incentive to increase activity at Heritage sites and improve business opportunities.
Before I take questions can I remind the Members that in addition to what is presented to you today OPW also manage other services, which are not funded directly from Vote 13. In 2013, OPW incurred expenditure on behalf of other Government Departments and Agencies amounting to €68m. The main areas of expenditure were the urgent provision of schools for the Department of Education, the Irish Youth Justice Service facilities in Oberstown, the delivery of the Intreo programme for the Department of Social Protection and the leasing of accommodation on a repayment basis for numerous clients. As an organisation we provide building, procurement and project management advice and assistance to government departments and agencies.
I would be happy to take any questions now from members of the Committee.