Tuesday 12 December 2017

Dan White: Litany of past waste bodes ill for €42bn vote-grabbing plan

The Thornton Hall Prison site – pictured here in 2010 – has plummeted in value since its purchase by the Government for almost €30m in 2005
The Thornton Hall Prison site – pictured here in 2010 – has plummeted in value since its purchase by the Government for almost €30m in 2005

AfTer being forced to tighten its belt since the recession, the Government let it out a few notches yesterday when it unveiled its plans to spend €42bn on a raft of public capital projects over the next six years.

Among the projects getting the nod are the new National Children's Hospital, a slimmed-down Metro North, 35,000 social housing units, over 60,000 new primary and secondary school places as well as whatever your having yourself.

While a cynic might point to the imminence of the general election - which must take place by next April - in truth many of the projects for which for which funds were provided yesterday are desperately needed.

One had only to listen to the cries of anguish that went up from supporters of projects that failed to make the cut to be reminded of just how savagely public investment has been slashed over the past seven years.


So far so good, but what guarantee do we have that large chunks of this money won't be squandered?

Unfortunately, if the 2014 annual report of the official public spending watchdog, the Comptroller & Auditor General, is any guide, then the answer is - none at all.

First, a little disclosure. In the distant past I was once a very junior member of C&AG's staff.

If the 2014 annual report is any guide very little has changed over the past three decades. The report lists a catalogue of waste and extravagance at the taxpayers' expense.

At a time when many of us are still struggling to pay increased taxes in the wake of the economic mess left behind after the Celtic Tiger years, the C&AG's report reveals that a massive €2bn of taxes due were unpaid at the end of 2014.

While some of this money will never be paid to the exchequer, some two thirds of it (about €1.3bn) is deemed to be "collectible".

However, the taxman doesn't seem to be overly exerting himself in collecting this money with half of it - about €650m - not being subject to either enforcement proceedings or a payment plan.

Other beauts unearthed by the C&AG included the €290m that the private health insurance companies owe the HSE in unpaid hospital bills and the €152m paid out to assorted accountants and lawyers in connection with the banking crisis.

Elsewhere, we had €38m spent on Eircode - the C&AG is openly sceptical that the Government's new postal code will deliver the anticipated efficiencies - and the €50m spent on the site of the proposed new prison at Thornton Hall, now worth just €2.4m.

As usual, you just couldn't make this stuff up.

So will future C&AG reports detail massive waste and extravagance, when the organisation examines spending on some of the capital projects which got the green light yesterday?

To take one example, and at the risk of repeating myself, I remain extremely sceptical about the 'new' Metro North, the centrepiece of the Government's public investment programme.

Originally supposed to cost €3.3bn, the figure has now been magicly cut to 'only' €2bn.

Among the cost-cutting measures employed to achieve this reduction are smaller stations with shorter platforms spaced further apart.

Will a future Government be forced to reverse this economy, no doubt at enormous cost, as it puts in more stations and extends the existing ones to persuade more commuters to travel on the expensive new public transport system?

What the C&AG's annual report should tell us is that, without putting in place proper oversight mechanisms, large-scale waste is virtually inevitable when the Government is spending our money.

Politicians, of all parties, are far more interested in announcing electorally-popular projects that help ensure their re-election than in the dull, boring follow-up stuff such as scrutiny, which doesn't do much to win votes, but is essential if we are to prevent waste.

But failing to apply this scrutiny means that we will all end up paying the price when today's politicians are in their dotage.

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