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File image of PAC chair Brian Stanley.
COmptroller and Auditor General

PAC chair Brian Stanley says C&AG report shows ‘taxpayer is failing to achieve value for money’

Stanley said it is ‘difficult to put into context the level of expenditure that is being lost by the state each year and the level of potential revenue that is being forgone’.

THE CHAIR OF the Public Accounts Committee (PAC) Brian Stanley said the “taxpayer is failing to achieve value for money” following the release of the Comptroller and Auditor General’s Annual Report for 2022.

The Comptroller and Auditor General (C&AG) is tasked with providing “independent assurance that public funds and resources are used in accordance with the law, managed to good effect and properly accounted for and to contribute to improvement in public administration”.

The C&AG’s annual report “identifies issues which merit consideration by the Committee of Public Accounts in the interests of transparency and accountability”.

Commenting on the publication of the 2022 annual report, PAC chair and Sinn Féin TD Brian Stanley said: “It is difficult to put into context the level of expenditure that is being lost by the state each year and the level of potential revenue that is being forgone.”

He added that PAC will “scrutinise these areas of concern” over the next 12 months and “deliver outcomes that will provide the taxpayer with value for money”.

Of the 25 chapters identified by the C&AG, Stanley highlighted several as being of particular concern.

These areas of concern include the Sustainable Energy Authority Ireland’s (SEAI) retrofit scheme.

The SEAI is the national retrofit delivery body and received funding of around €1.1 billion in the ten-year period to the end of 2022.

The C&AG annual report focussed on two key retrofitting schemes – the ‘better energy warmer homes’ scheme and the ‘better energy homes’ scheme.

Expenditure on these two schemes amounted to €538 million in the ten-year period to the end of last year, accounting for around 60% of the SEAI’s total expenditure under residential and community energy efficiency.

Last year, 39% of the retrofits under the “better energy warmer homes” scheme were inspected

However, 55% of these cases required further work.

Meanwhile, 18% of retrofits under the “better energy homes” scheme were inspected last year and 46% of cases did not pass the inspection.

Following rectification works, almost all cases were resolved.

The annual report also warns that the schemes have “contributed very modestly to the required emissions reduction”.

The report adds that the SEAI will require a “very significant increase in activity level” to reach its target of retrofitting 65,000 dwellings by the end of 2025.

As of the end of 2022, the SEAI had delivered 28% of this target.

HSE deficit

Stanley noted that the HSE’s finances were also identified by the C&AG as an area of concern.

As of the end of 2022, the HSE had an “accumulated deficit of €1.24 billion” for incurred expenditure.

Of this figure, €838 million was “inherited on its establishment for authorised expenditure incurred by the former health boards”.

The report states that this deficit will “eventually will need funding to meet the liability”.

Meanwhile, the operating deficit reported last year was €185 million.

Land Aggregation Scheme

The Land Aggregation Scheme (LAGS) was established in 2010.

The C&AG describes its mission as to “alleviate the financial burden on local authorities relating to the maturing Housing Finance Agency loans, where residential development of the associated land had not proceeded”.

In return for LAGS funding, local authorities were required to surrender the related land for a nominal fee of €1 per site.

In 2018, the Housing Agency assessed that the LAGS portfolio had the potential to deliver 5,365 social houses.

However, as of the end of August, 676 social housing units had been completed.

These 676 units equals an average of 52 units per year in the 13-year period since the scheme was developed and less than 13% of what was estimated could be achieved.

A further 243 social houses units are at “various stages of development”.

Also as of the end of August, no development plans were in place for 39 of its 73 sites.

A number of these sites have since been deemed “unsuitable for social housing development” for reasons including flooding risks, zoning issues, and a lack of demand.

The cost of this scheme up to the end of 2022 was €131.6 million.

Commenting on this area of the report, PAC chair Brian Stanley said: “Once again, the Government has failed to deliver on social housing.”

National Training Fund

The National Training Fund (NTF) was established as a dedicated fund to support employment-focused training.

It is funded by way of a levy on employers collected through pay related social insurance (PRSI).

The income of the fund in 2022 was €951 million, and by the end of 2022, the fund had an accumulated surplus of €1.372 billion and could potentially reach €2 billion by the end of 2025.

While the report notes that “a prudent level of reserves is necessary”, it adds that the “the level of surplus at year-end 2022 would be sufficient to fund total 2022 expenditure twice over, and exceeds the amount required for a prudent reserve”.

The Department of Further and Higher Education has acknowledged that the current level of accumulated surplus is in excess of the level required to maintain programme funding.

The C&AG report said the Department has “put forward proposals for increasing spending through the annual estimates processes”.

Stanley said this surplus is “of significant concern considering our chronic shortage of mechanics, construction workers and key tradesmen”.

He said there needs to be a “more strategic focus on expanding apprenticeship programmes, [as] the funding is clearly there”.

The C&AG annual report also found that there was a “lack of consistency in the oversight and reporting mechanisms in place for the bodies in receipt of NTF funding”.

For example, SOLAS received 44% of NFT funding last year, but there is no formal reporting process in place between the Department and SOLAS on the use of NTF funds.

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