Tag Archives: dahg

WI funding

The cuts in funding to Waterways Ireland have been covered here many times. Now, thanks to the invaluable KildareStreet, we have official information on the matter from the Minister for Fairytales. A young chap called Martin Heydon [who has annoying automatically changing pics on his website], FG TD for Kildare South, put this written question to the minister:

To ask the Minister for Arts, Heritage and the Gaeltacht the funding provided by her Department to Waterways Ireland in each of the past five years; and if she will make a statement on the matter. [36691/15]

The minister, Heather Humphreys, FG TD for Cavan-Monaghan, wrote:

Waterways Ireland is co-funded by my Department and the Department of Culture, Arts and Leisure (DCAL) in Northern Ireland. The current expenditure of the body is funded 85% by my Department and 15% by DCAL, which reflects the distribution of the navigable waterways in each jurisdiction. Capital expenditure is funded 100% in the jurisdiction in which the capital works are carried out.

The amount of funding allocated to Waterways Ireland from my Department’s Vote for each of the years from 2011 to 2015 is set out in the following table.

Year €m
2011 €30.300m
2012 €27.099m
2013 €25.463m
2014 €24.183m
2015 €23.426m

This is useful because, since 2011, the annual budget figure for North South Cooperation has not been broken down between Waterways Ireland and the language shamrock. Last time it was, WI got about 60% of the current expenditure total and almost all the capital. We’ve had to wait for WI’s annual reports to find how much it got two years earlier.

So it’s useful to have these figures, but they would have been even more useful if the minister had distinguished between current and capital expenditure.

From the Multi-Annual Capital Investment Framework, it seems that WI got €3,368,000 for RoI capital spending in 2015. Subtracting that from the minister’s 2015 figure of €23,426,000 suggests that WI’s current spending budget for RoI in 2015 is €20,058,000, which is less than my rough estimate of 60% of the NSCoop total (€35,072,000 X 0.6 = €21,043,200).

In 2011, the Estimates figures showed that WI was to get €6 million for capital expenditure. Subtracting that from the minister’s figure for 2011, €30,300,000, leaves €24,300,000 for current spending in that year.

I haven’t cross-checked that with WI’s accounts, and I could be wrong in other ways: feel free to add a comment below if you can help to correct these figures.

What I make of it is that

  • total RoI spending on Waterways Ireland in 2015 was 77% of the 2011 figure
  • capital spending was down from €6,000,000 to €3,368,000, a cut of almost 44%
  • current spending was down from €24,300,000 to €20,058,000, a cut of 17.5%.

Clearly, Waterways Ireland would benefit from having new sources of income outside the control of the central exchequer. Perhaps Mr Heydon could persuade the canal-based boat-owners of Co Kildare to pay higher charges?

Capital expenditure

I said above that capital spending was down from €6,000,000 in 2011 to €3,368,000 for 2015, a cut of almost 44%.

However, it had been €11,000,000 in 2008, whence the cut is over 69%; the 2016 figure is less than 25% of the 2008.

It is clear therefore that the government does not see investment in waterways as being productive, either of economically desirable results (eg tourism earnings, jobs) or of politically desirable benefits for its TDs.

I wonder therefore why one of its TDs has drawn attention to the matter.

Grim oop north

Something similar has happened in Norn Iron, where an MLA of the minister’s party has asked a question about Waterways Ireland, whose HQ is in his constituency.

Another young chap, one Phil Flanagan (who seems to have joined Sinn Féin seven days before being elected as an MLA. Could that be right?), has asked two questions of the (Sinn Féin) Minister for Marching Bands:

  • AQW 50030/11-16: To ask the Minister of Culture, Arts and Leisure to detail the amounts in (i) financial terms; and (ii) percentage terms of the budget in Waterways Ireland that is set aside for pension payments for former staff; and whether this is comparable with other bodies.
  • AQW 50029/11-16: To ask the Minister of Culture, Arts and Leisure how the value of the Euro has affected the budget of Waterways Ireland in each of the last three years.

I look forward to reading the answers.

Sort it yourself, Heather

No, that’s not me saying it: that’s the message from Enda Kenny to Heather Humphreys about Saunderson’s Sheugh. Recall that Ms Humphreys’s Northern Ireland counterpart has been pressing her to do something about the Ulster Canal:

Moving to implementation would have a positive impact on wider North/South relations. It would provide delivery on a commitment given by the North South Ministerial Council in 2007 in the context of the restoration of the Northern Ireland Assembly and Executive following a five year hiatus. It had not been possible to make visible progress up to now in the absence of planning permission. However, now that the necessary preparatory work has been completed and the required planning permissions are in place, failure to proceed to implementation could be viewed as tantamount to retracting the commitment given in 2007 and reported on regularly at North South Ministerial Council meetings since then.

Strange words to find in a business case, but that’s where they are: in the Department of Arts, Heritage and the Gaeltacht’s Restoring the Ulster Canal from Lough Erne to Clones: Updated Business Case February 2015. They read to me as if they might have been written by Carál Ní Chuilín’s Department of Culture, Arts and Leisure in the draft they sent to DAHG; it might have been tactful to remove them, as they smack of the message I envisaged here:

[…] I suspect that Sinn Féin put a gun to someone’s head: “We’re fed up waiting for our sheugh. Start digging or the baby gets it.”

Presumably, then, Ms Humphreys went to her government colleagues and asked for money to buy a few shovels. It is clear that the government took a decision on the matter:

The Government also remains committed to the Narrow Water bridge project and to developing the Ulster Canal. The Government made a decision in regard to an element of that project today.

That was Enda Kenny in the Dáil on 24 February 2015. Later in the same discussion, he said:

This morning, on a recommendation from the Minister for Arts, Heritage and the Gaeltacht, the Government approved a recommendation from Waterways Ireland to allocate €2 million from its resources to address a 2.5 km section of the Ulster Canal. It is a stand-alone project which will demonstrate further evidence of great co-operation. I understand a further 11 km are due for assessment after that.

Now, I am quite ready to believe Mr Kenny’s assertion that Waterways Ireland volunteered to have its already tattered budget cut by another €2 million to pay for dredging the River Finn; I also believe Mr Kenny’s assertions about economic recovery and about the existence of unicorns. I’m less certain that having the southern state pay the entire cost can be called “evidence of great co-operation”. But I am happy to note that no decision has been taken to dig a further 11 km of sheugh to Clones.

It seems, though, that — despite its commitment to sheughery — Mr Kenny’s government does not intend (at least until that economic recovery is further advanced and the unicorn mating season is over) to pay an extra penny or cent to cover the costs. That is very wise, but I suspect that it left Ms Humphreys swinging in the wind: forced to do something to satisfy DCAL and Sinn Féin but unable to extract any extra money from the government. Waterways Ireland then — without, I am sure, any prompting — nobly volunteered to reduce the spending levels agreed in its business plan just two months before, and to sell some unidentified property, to come up with €2 million to save its southern minister.

I have asked DAHG for a list of those government departments to which the business case was sent; I’ll then ask them what they said about it. As it stands, it seems that DAHG’s work of imaginative literature failed to convince the Irish government.

 

Shagging the Shannon to shovel the sheugh

On 24 February 2015, the Irish Times published an article headed

First stage of Ulster Canal restoration due to begin in April
Some €2m will be spent on a section of the Shannon-Erne waterway

It ended with these sentences:

The €2 million will be drawn from the funds of Waterways Ireland, a north-south implementation body. It will carry out the dredging of a 2km section of the Erne river and the construction of a new navigation arch at Derrykerrib Bridge to accommodate boat traffic, with a target completion date of April 2016.

It may be that the Irish Times doesn’t know very much about waterways. If it did, it might have been aware that, on 18 December 2014, the North South Ministerial Council approved Waterways Ireland’s Business Plan 2015, which included this Action:

3.6 Progress the restoration of the Ulster Canal on an incremental basis. €1,000

So on 18 December 2014 the North South Ministerial Council — which for all practical waterways purposes consists of Heather Humphreys, the southern minister for waterways and other stuff, and Carál Ní Chuilín, her northern counterpart — approved the allocation of €1,000 to the Ulster Canal in Waterways Ireland’s 2015 plan. Yet, just over two months later, they expect Waterways Ireland to spend about €2 million on the blasted thing, about €1.5 million of it in 2015.

The southern government’s party of treasure-seekers seems to have disappeared entirely: at any rate it doesn’t seem to have found any money. And the two ministers’ departments have presided over successive years of cuts in Waterways Ireland’s current and capital budgets, cuts whose effect has been worsened by the woefully inadequate provision for an ever-increasing pensions bill. Waterways Ireland’s Corporate Plan 2014–2016 shows a cumulative increase of €984,000 in pension costs over the period of the plan, which wipes out a lot of savings in other areas.

I suppose that curiosity is a weakness in journalism. Were it not so, two questions might have struck the Irish Times:

  • how is Waterways Ireland to come up with €2 million out of an ever-decreasing budget?
  • why has Waterways Ireland’s Business Plan been so violently disrupted only two months after it was approved? The €2 million is half WI’s total capital budget spending in for the republic in 2015; it will be recalled that the republic, in a fit of more than usually nitwitted arrogance, undertook to pay for a canal to Clones, which is what the powers-that-be are pretending Saunderson’s Sheugh is.

I can answer the first question, at least for 2015, during which WI expects to spend €1,416,000:

  • €166,000 will come from Heather Humphreys’s department
  • €900,000 will (WI hopes) come from the sale of property assets
  • €150,000 will come from the postponement of an IT programme
  • €220,000 will come from the postponement of non-navigation works on the Shannon
  • €90,000 will come from postponing development of the Barrow Blueway.

I don’t know what property assets WI can sell to bring in the requsite amount. It seems that damage to everyday navigation has been avoided, but the Shannon and the Barrow are to suffer to pay for dredging a river that merely provides a small extension of the Erne navigation.

As for the second question, I suspect that Sinn Féin put a gun to someone’s head: “We’re fed up waiting for our sheugh. Start digging or the baby gets it.” The baby might have been Heather Humphreys’s Dáil seat or it might have been something more important. And the gun was, I suspect, a message accompanying the “business case” prepared by the northern department and sent to the southern. [I have asked both departments for copies and other information.]

Arthur Aughey, then lecturer in politics at the University of Ulster, wrote in Magill magazine in February 2001:

Puritanical republicans grieve at the thought that the hunger strikers [of 1981] died to achieve the Waterways Ireland Implementation Board.

I suspect that the less puritanical republicans, those who operate in the devolved institutions of Northern Ireland, are now demanding that the southern government deliver, through the “Waterways Ireland Implementation Board”, what nitwitted previous governments promised. It’s a pity that Sinn Féin and those previous governments couldn’t have come up with a more sensible list of waterways and other infrastructural projects.

 

Backing Basil

Can it be that there are two sane politicians on the island of Ireland? If so, that would be the highest number since Morpeth and Mulgrave.

Down here in the Free State we have the Sainted Leo Varadkar [KH, I see]; Oop North, where it’s grim, they have Basil McCrea [BRA] of NI21. Basil has another Written Question for Carál Ní Chuilín, NI Minister for Waterways Ireland [and Lambeg drumming, according to some of her fellow-MLAs]. Basil’s question is:

To ask the Minister of Culture, Arts and Leisure whether her Department is considering the introduction of an annual fee for boat users to fund and improve boating infrastructure.

The only problem with that is that — at least for the Waterways Ireland navigations — the fee is needed not to improve the infrastructure but to keep the lights on, get the equipment repaired and buy basic consumables. It seems to me that boat-owners either don’t know or don’t care how bad the financial situation is. I presume that the owners who are helping themselves to free moorings around Lough Derg are in the don’t-care category.

Barbara Lewis Solow, in The Land Question and the Irish Economy 1870–1903 [Harvard University Press, Cambridge Massachusetts 1971], shows that the problem with Irish agriculture in the late nineteenth century was that rents were too low and there were not enough evictions. Much the same could be said of Irish waterways: charges are pretty well non-existent and even such few rules as there are are widely ignored.

In such condition, there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing, such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.

What Waterways Ireland and the Irish waterways need, fast, is a new set of strict byelaws, with significant user charges and strict enforcement mechanisms, preferably empowering the tax authorities to seize income and property.

The ministers should stop faffing around and get on with it.

 

 

Rejoice!

Waterways Ireland’s annual report for 2012 has now been published and is available for download here [PDF].

The English-language version begins on page 77 of 144; the earlier pages are devoted to an Irish-language version, that tongue being widely used in Belfast North.

The Ulster Scots Foreword gets in twice, but Dawn Livingstone is described as Chief Executive and not, alas, as Heid Fector. In a blow for parity of esteem, only the Foreword has been translated into the Hamely Tongue. And we continue to find “Waterways Ireland” translated as “Watterweys Airlann” in WI’s logo but as “Watterwyes Airlan” in the text. No wonder the shinners are running rings around the unionists [although I see that David Cameron intends to fix that].

Now I must read the report to see if I can spot why its publication was so long delayed, but we must welcome the success of the peace process that has reconciled the NI Department of Culture, Arts and Leisure with the roI Department of Arts, Heritage and the Gaeltacht.

I suppose there’s be no chance of the 2013 report being published soon …?

NSMC

The joint communiqué from last week’s North/South Ministerial Council Inland Waterways meeting is now available here. There was an exciting bit:

SECTORAL PRIORITIES

2. Ministers had a discussion on various priorities within their remit and noted that these will be contained in a report to be considered at a future NSMC Institutional meeting as part of the ongoing review into sectoral priorities.

Hmm … what’s cooking there? I do wonder why the NSMC bothers publishing content-free stuff like this. We may have to ask the US NSA to bug the meetings. Oh, hang on ….

Here’s a good bit, though:

PRESENTATION BY WATERWAYS IRELAND

3. Waterways Ireland delivered a presentation to Ministers entitled “Ireland’s Inland Waterways – Building a Tourism Destination”. The presentation provided an overview of the progress being made by Waterways Ireland in placing the waterways and the waterway experience at the centre of the tourism offering both in Ireland and internationally.

Now that is useful and important work. But, as I have pointed out elsewhere [including to Waterways Ireland], the WI draft Corporate Plan 2014–2016 said nothing about tourism. Some years ago, I thought that it was a mistake to have a Marketing & Communications Strategy and a Lakelands tourism initiative that seemed to exist outside the corporate planning process; I am still of the same mind.

I have asked Waterways Ireland for a copy of the presentation, and for a copy of the Strategic Development Plan for the Grand Canal Dock, Spencer Dock and Plot 8 that was mentioned in WI’s progress report. That report also covered:

  • continuing maintenance
  • public consultation on canal bye-laws
  • a Built Heritage Study and a GIS-based navigation guide for the Lower Bann
  • an environmental award for  work in restoring, protecting and promoting the heritage assets that are Spencer Dock and Grand Canal Dock
  • towpath development and work on the cycleway from Ashtown to Castleknock on the Royal
  • donating two barges for “recreational and community use”
  • “partnerships to utilise three unused navigation property for community and recreational use”, which I don’t know anything about.

The important part was this:

BUSINESS PLAN AND BUDGETS 2013 AND 2014 AND CORPORATE PLAN 2014-2016

5. Ministers noted the position with the 2013 Business Plan and budget. They also noted that Waterways Ireland has undertaken a public consultation on the draft Corporate Plan 2014-2016, the preparation of a draft 2014 Business Plan by Waterways Ireland and that the plans will be reviewed after the public consultation is analysed. They also noted that Sponsor Departments will continue to work together with Waterways Ireland to finalise the Business Plans and Budgets for 2014 and the Corporate Plans for 2014-2016 that will be brought forward for approval at a future NSMC meeting.

I read that as showing that the north-south deadlock continues. The 2012 accounts have still not been published and the plans for 2014 won’t be approved until (at the earliest) three quarters of the way through the year.

The NSMC heard something about the Clones Sheugh but has decided not to tell the citizenry anything about it. It agreed to some property disposals and decided to meet again in October. But there was one odd item:

SPECIAL EU PROGRAMMES BODY BUSINESS PLAN AND BUDGET 2014 AND CORPORATE PLAN 2014-16

8. Ministers approved the Special EU Programmes Body Business Plan and Budget 2014 and Corporate Plan 2014-16.

The oddity is that the SEUPB is a separate body and usually gets its own meeting and communiqué. The last six meetings (before this one) have been attended by NI folk from Finance & Personnel and RoI folk from Public Expenditure & Reform (or, before that, Finance).

So who let spending ministers into the sweetshop? And why? Suspicious-minded folk might think that there is a plan to  nick a lot of Euroloot for the Clones Sheugh to get the Irish government off the hook persuade the Europeans of the benefits of investing in the reconstruction of a small portion of the Ulster Canal. We note that, on the previous day, Jimmy Deenihan gave a longer than usual reply to the standard question about the Sheugh, including this:

The Inter-Agency Group has met four times, last meeting on 9 December 2013. The Group continues to examine leveraged funding opportunities for the project. This includes the exploration of EU funding which may be potentially available in the next round of structural funds covering the period 2014–2020.

I have a better idea. Vladimir? There are oppressed Russians in Clones ….

 

 

 

War over waterways: Sinn Féin -v- the Free State

I reported here that, in June 2013,the North South Ministerial Council (in inland waterways format) approved, on the same day, Waterways Ireland’s business plan and budget for 2012 as well as its annual report and draft accounts for that year. In other words, it approved the budget and plan eighteen months after the start of the year to which they applied; it approved the plans for 2012 and, on the same day, approved the outcomes.

Furthermore, by November 2013, 88% of the way through 2013, it had not approved the budget for that year (I don’t know whether it has yet done so). And, as of today (22 January 2014), WI’s annual report for 2012 has not yet been published.

I wrote:

Is it possible that one minister wants to spend very much more or less on waterways than the other does? As the total current expenditure is fixed at 85%/15%, it seems to me that one side might very well come up with a figure that the other didn’t like.

Is it possible that DCAL, run by Mr Adams’s party colleague Carál Ní Chuilín, is more keen on cross-border bodies than is DAHG, run by Fine Gael minister Jimmy Deenihan? Or are both of them struggling to find savings to pay for the Clones Sheugh, or at least as a deposit for the SEUPB?

Or could it simply be that WI is having great difficulty in cutting its expenditure to fit within the limits imposed by the RoI budget?

I then sent enquiries to Waterways Ireland, the (NI) Department of Culture, Arts and Leisure (DCAL), the (RoI) Department of Arts, Heritage and the Gaeltacht and the North South Ministerial Council. From the repsonses, and from yesterday’s statement to the NI Assembly by Carál Ní Chuilín MLA, NI Minister of Culture, Arts and Leisure, it is clear that I was right in my first para; it is possible that the first sentence of the second para is right too.

There is a major disagreement between the northern and southern departments about the level of cuts to be applied to Waterways Ireland’s budget and it is not clear what mechanism can be used to resolve it. DAHG, applying Irish government policy, wants bigger cuts than DCAL does.

NSMC

After each North South meeting, the secretariat issues a rather bland communiqué; the inland waterways ones are here. I suppose that the secretariat can’t be expected to write “There was a blazing row at yesterday’s meeting, skin and hair flying, and the ministers aren’t speaking to each other”. I mean, they wouldn’t write that even if it were true, which I’m sure it isn’t.

On 9 December 2013 I wrote to NSMC (I omit salutations and irrelevancies here):

Are you able to say anything about why the NSMC Inland Waterways did not approve the 2012 business plan and budget for Waterways Ireland until eighteen months after the start of the year in question? As far as I can see from the minutes for meetings since 2007, that is a highly unusual degree of lateness.

NSMC replied on 11 December (with a copy to the RoI Department of Foreign Affairs):

[…] this is an issue for both Sponsor Departments and they can be contacted directly.

On the same day I asked:

Have you any responsibility for seeing that the terms of the WI Financial Memorandum [PDF] are observed? It seems to me that they have been ignored in this case.

Despite a reminder, I have not yet received a reply.

DCAL

I wrote to DCAL on 10 December 2013:

I would be grateful if you could help me to understand why the North/South Ministerial Council did not approve the 2012 budget and business plan until 18 months after the start of the year to which it applied.

DCAL responded on 11 December 2013:

Waterways Ireland had submitted a draft 2012 Business Plan detailing the activities required to achieve goals set out in their 2011/2013 Corporate Plan. Recognising the challenges presented by the economic climate there were extended negotiations to agree the 2012 budget. The DCAL Minister raised concerns about going beyond the required savings advised by both Finance Departments. Minister Ní Chuilín therefore sought, and received, assurances from Waterways Ireland that frontline services would be maintained.

I sent follow-up queries on 16 December:

I am not entirely clear on the implications of your third sentence: “The DCAL Minister raised concerns about going beyond the required savings advised by both Finance Departments.”

Do you mean that Waterways Ireland proposed to cut its spending by more than the percentage cuts suggested by the Finance Departments? Or to spend less than it received (or expected to receive), in euro, from the two sponsor departments? If so, why did WI want to do that?

I would also be grateful if you could tell me what WI’s “frontline services” are and why they are deemed to be more important than other services.

And I would be grateful for more information on the reason for the extended delay in approving the busiess plan and budget: eighteen months after the start of the year, which was presumably even longer after the plan was drafted. I would be surprised to find that seeking and receiving assurances took eighteen months.

Did the delay result in a breach of the terms set out in the Financial Memorandum governing WI’s affairs?

I would also be grateful if you could tell me what delayed the approval of WI’s 2013 budget. I note from the NSMC minutes that it was not approved in June 2013; the matter is not mentioned in the minutes of the November 2013 meeting but, on 19 November 2013, the RoI Minister for Public Expenditure and Reform replied to a written question from Gerry Adams TD saying, inter alia, that “The 2013 Budget allocation to the Body are subject to on-going discussion by the two Sponsor Departments.”

That suggests that approval of the 2013 budget is at least eleven months late. I note too that the 2014 business plan and budget, and the Corporate Plan 2014-2016, were not approved at the November NSMC meeting. And I note that An Foras Teanga [Foras na Gaeilge + Tha Boord o Ulstèr-Scotch], the other North-South body sponsored by your department and the Department of Arts, Heritage and the Gaeltacht, was also, in November, awaiting approval of its 2013 budget.

There are two further items on which I would be grateful for information:

(a) is it proposed that the Hutton recommendations be applied to Waterways Ireland (and other bodies in the North-South pension scheme)? If so, what is the expected effect on WI’s budget and on staff take-home pay?

(b) WI’s accounts for 2011 (the latest I have seen) suggest that your department paid less than 15% of the money WI received from its sponsor departments. Did your department pay 15% in 2012 and 2013 and will it do so in 2014? And how do you take account of the effect of currency fluctuations on WI’s income denominated in its working currency, the euro?

Despite a reminder, I have as yet received no reply.

DAHG

I wrote to DAHG on 26 November 2013 with several questions; I include below only that relevant to this posting.

On 19 November 2013, in a written answer to Gerry Adams, Jimmy Deenihan said […]: “The 2013 and 2014 Budget allocations to the Bodies are subject to ongoing discussion by the two Sponsor Departments and will require, of course, formal approval by the NSMC.”

I would be grateful if you could tell me (a) why Waterways Ireland’s budget had not been finalised when 88% of the year had passed and (b) how that affected budgetary management in the Body.

The department replied on 3 December 2013:

As you are aware, Waterways Ireland is co funded by the Department of Arts, Heritage and the Gaeltacht and the Department of Culture, Arts and Leisure, Northern Ireland.   The 2013 Business Plan and budgets have been discussed by Ministers at NSMC Inland waterways meetings and key priorities for 2013 identified.  Indicative budgets have been provided by the Departments to Waterways Ireland as a pragmatic measure for business planning and operational purposes and the body is operating within these indicative allocations.

On 9 December I replied:

Thank you. That answers my question (b) pretty well. However, you haven’t answered (a): why Waterways Ireland’s budget had not been finalised when 88% of the year had passed.

I would be grateful for information on the causes of this extraordinary delay.

I have been wondering whether the problems of WI’s budget were very difficult to resolve or whether there was some major disagreement between the northern and southern ministers. If there was such a major disagreement, what was it about?

The department replied on 17 December 2013:

The Departments are still in discussions to agree the budgets.  The position is The Department of Culture, Arts and Leisure in Northern Ireland is not prepared to agree a 2013 budget for the Body in excess of a minimum efficiency saving of 3% set out in the two Departments of Finance Funding Framework for the North South Bodies. As you are aware from the Parliamentary Question Reply this Department’s REV provision for Waterways Ireland for 2013 is €25.463m, a 6% efficiency saving on 2012. Given the pressures on the public finances and on the Departments budget allocation, the Department is not in a position to provide any additional funding that would maintain the proportionality of funding. 85% of current funding is provided by Department of Arts, Heritage and the Gaeltacht and 15% by Department of Culture,  Arts and Leisure, Northern Ireland.

I responded on 18 December 2013:

[…] Just to make sure I understand you properly: when you say “a 2013 budget for the Body in excess of a minimum efficiency saving of 3%” am I right to presume that the phrase “in excess” applies to the savings or cuts rather than to the budget itself?

I also asked three questions about items of background information relevant to this topic:

1. I am less familiar with the NI Executive’s budgetary process than perhaps I should be. I gather that there are multi-year budgets, linked to a programme for government, with annual estimates and possibly supplementary estimates. The multi-year element seems to be stronger than in Irish budgets, but I wonder whether (aside altogether from the current economic situation) it is difficult to make decisions within the constraints of the different budgetary timescales.

2. I have not yet checked all Waterways Ireland annual reports, but reading that for 2011 suggests that DCAL paid slightly under 14%, rather than 15%, of WI’s current expenditure. Are minor deviations from the 85/15 ratio unavoidable? Do they balance over time?

3. Do currency fluctuations affect the amounts actually paid by the two departments? If so, how are the effects taken into account?

I have not yet received a reply.

Waterways Ireland

On 6 January 2014 I wrote to WI:

I would be grateful if you could tell me the effect on Waterways Ireland of the continuing dispute between its sponsor departments over WI’s budgets and business plans.

On 8 January WI said:

Waterways Ireland enjoys a supportive and positive relationship with both departments.

On 14 January I said:

I am very glad to hear it, but I don’t recall asking a question about that.

I repeated my original question, to which I have not had a reply. As with NSMC, I don’t really expect WI to be able to say anything undiplomatic. However, I would have thought that there must be some inconvenience in working to “indicative allocations”. I wonder whether they are based on DCAL’s preferred level of cuts, DAHG’s preferred level or some compromise. And if compromise is possible on the indicative allocations, why can’t the main issue be sorted out?

Furthermore, the delay in publishing the 2012 accounts suggests that there has been some real difficulty in operating under the indicative allocations regime. Or perhaps there is some other row altogether.

NI Assembly

Reporting yesterday to the NI Assembly on the November NSMC meeting, the NI Minister confirmed that there was disagreement.

Karen McKevitt [SLDP, South Down]: […] The chief executive set out a strategic direction for Waterways Ireland for 2014-16. In that, she mentioned budget efficiencies. Can the Minister highlight to the House what those might be?

Carál Ní Chuilín [SF, Belfast North]: The Member is right: the new chief executive gave us a very good and detailed presentation. Indeed, the Member will be aware — if she is not, she will be when I finish my answer to her question — that there have been additional pressures on everybody across the board in achieving efficiencies. However, as I have repeated to the Member and to other Members, and despite the meetings that I have had with Minister Deenihan around any proposed additional efficiencies that the Irish Government are saying are required, I am totally reluctant to go above and beyond any efficiencies that we agreed previously, and I have stated that to the chief executive of Waterways Ireland. That is the position. Following that, the Finance Departments and, indeed, officials and Ministers will hopefully be submitting additional or new budget plans very soon. I think that issues relating to any agreement to additional efficiencies lie beneath the Member’s question, but I can categorically state that I have not agreed to those.

“Efficiencies”, by the way, means “cuts”.

The importance of waterways to Sinn Féin

I have remarked several times here that Sinn Féin asks many Dáil questions about waterways, notably the Clones Sheugh, with Maureen O’Sullivan providing recent competition. I wrote elsewhere recently:

Waterways Ireland is a political creation: its very existence reflects a nationalist and republican desire to show the benefits of all-Ireland institutions — and a unionist desire to confine such institutions to areas of minor importance. […]

In prosperous times, managing recreational waterways is a feelgood activity, combining opportunities for local and national politicians to get their photos in the papers with relatively low risk of political controversy. Nonetheless, WI had to tread warily, especially in its early years; it has almost (but not quite) entirely avoided such controversy.

Timing

I don’t know if there is ever a good time for disputes between your paymasters, but it’s not as if Waterways Ireland, and its new CEO, didn’t already have enough to worry about. To quote again from the same piece:

Compared with British Waterways and C&RT, Waterways Ireland has very little real property from which it might derive an income — and very few other sources of income. According to its accounts for 2011 (the latest available), its total income was over £38 million but it earned less than half a million pounds from licences, property, interest, operating income (including charges to waterways users) and other sources. The rest came from its two sponsor departments.

Charges to boaters have traditionally been low or non-existent: zero for a boat kept on the Erne or on one of the Shannon lakes, with modest charges for passing through Shannon or Shannon–Erne Waterway locks; on the Grand, Royal and Barrow, an annual charge of €128 covered lock passages and mooring. There was no licence fee. Waterways Ireland has begun to impose slightly higher larger charges but may meet resistance.

But there is no immediate prospect of imposing charges high enough to make a significant difference to Waterways Ireland’s budget. That budget is set by the North South Ministerial Council: each government pays for capital works (eg harbour improvements) carried out in its own jurisdiction, while the running costs are paid in a ratio intended to reflect the proportion of the waterways in each: 15% by the Northern Ireland Executive and 85% by the republic’s Government.

Some difficulty may be caused by different timings of the budgetary processes in the two jurisdictions, but a greater problem is that the fixed ratio can lead to deadlock. WI’s budget for 2012 was not set until July 2013, eighteen months late: its budget, business plan, annual report and draft accounts for 2012 were all set on the same day. Final accounts for 2012 had not been published and WI’s budget for 2013 had not been agreed by December 2013.

The cause of the delay was that the republic’s government wanted to cut the budget by more than the Northern Ireland Executive did. The Irish economy has had severe problems in recent years and the government was unable to honour its undertaking to pay for the restoration of the Ulster Canal from Lough Erne to Clones (a short stretch that crosses the border several times). Public expenditure has been cut for all government departments and public bodies but the scale of the cuts is larger than the Northern Ireland minister wants to see. If the republic’s government gets its way, by 2016 WI’s budget will be one third lower than it was in 2010.

That is not the only financial problem that WI faces. Staff transferred to it from Irish government departments carried with them their entitlements to pensions of half of final salary plus retirement lump sums of one and a half times final salary. And, as is the norm in the civil service, the pension system was unfunded. WI had quite a few staff in their fifties and, as they now retire, their pensions and lump sums have to be met out of WI’s normal income from its sponsor departments. The pace of retirement may even by accelerated by a desire to avoid charges arising from the Hutton pension proposals.

During the era of the Celtic Tiger, Waterways Ireland prospered: it acquired much new equipment, built new offices and developed and improved facilities for boaters and other users. It now faces a much more difficult financial future and it is hard to see how it can avoid reducing its level of service. At the same time, its new CEO is — rightly — determined to continue widening the appeal of the Irish waterways to more types of users: walkers, cyclists, anglers, canoeists and others.

Maybe the two ministers might get their act together.

I will report later on other items covered in Ms Ní Chuilín’s statement; the bad (if unsurprising) news is that she is still stuck on the sheugh, but perhaps she can persuade the Imperial Treasury to pay for it.

Waterways Ireland’s pensions burden

Let us suppose that you are an Irish civil service department, whose staff are employed on standard Irish civil service terms.

And let us suppose that your Secretary General’s 65th birthday was on 31 December 2013, by which time she had 40 years’ pensionable service. Her salary was €250,000 a year, so that’s the amount you (the department) paid to her in y/e 31 December 2013. Because of cutbacks, she is replaced, from 1 January 2014, by someone earning half that amount. So what is the cost of SecGens in 2014? Keep it simple: ignore employer’s PRSI and allowances and travel expenses and anything else.

Civil service pensions

In 2014, you will pay the new SecGen €125,000, half the old rate, but you will pay the retired SecGen €500,000, so your total expenditure on SecGens will rise from €250,000 to €625,000. [The timing may not be quite thus, but never mind.]

In 2015, the new SecGen will continue to get €125,000, but so will the old SecGen. So, even though your new SecGen gets half what the old one earned, the total cost to you remains the same.

And so on until the old SecGen dies. But if the new SecGen retires before that, you will have two retired SecGens drawing pensions and one even newer SecGen getting a salary ….

Under ordinary Irish civil service terms, someone who retires is entitled to a pension of one eightieth of final salary for every year of service, up to a maximum of forty years. So a SecGen who started, say, as a graduate entrant at the age of 25, stayed in the civil service and retired at age 65, would be entitled to a pension, for life, of half her final salary.

She would also be entitled to a lump sum of one and a half times her final salary. That’s why, on retiring, she gets an amount equal to twice her final salary: 1.5 times salary as a once-off lump sum plus 0.5 times as pension.

You could argue that that is an absurdly generous arrangement, but that’s not my point here: someone who started work 40 years ago under those conditions can’t be criticised for taking the money they’re entitled to, and it will be a long time before any revisions could take effect.

These pensions are defined benefit, non-contributory and unfunded: no money is put aside by either employees or the employer to meet pension payments in future years. It is assumed that the taxpayer will continue to meet the increasing costs.

Now, that’s all very well for the main-line civil service: it has been in existence for a long time; it’s very large, with a large pay bill; it has had SecGens retiring before and another retirement or two won’t greatly affect the overall cost.

But if you’re a relatively small organisation, dependent on the exchequer for most of your income but without any of getting extra money to pay for pensions, the retirement of one or two senior officials, or of larger numbers of lower-paid employees, could significantly increase your costs while doing nothing to improve your income or the amount of work you do.

That is happening to Waterways Ireland at the moment. I’ll give some details shortly, but first I want to get the pension scheme out of the way.

The woodchuck pension fund

Here is Wikipedia’s version of the tongue-twister about the woodchuck:

How much wood would a woodchuck chuck
if a woodchuck could chuck wood?
A woodchuck would chuck all the wood he could
if a woodchuck could chuck wood!

Coverage of the Waterways Ireland pension scheme in its annual reports reminds me of the woodchuck. I should say immediately that that is not a criticism of WI: it’s down to an accounting standard called FRS 17.

As far as I can make out, this standard requires WI to show in its accounts the entries that it would make for its pension fund, if it had a pension fund, even though it doesn’t have one. It does have a pension scheme, which I imagine sets out the rules about who is entitled to get what, but there is no pot of money put away, guarded by fierce trustees, to ensure that the pensioners of the future will get their money. Here is how I understand it; if I’m wrong (which wouldn’t be surprising), do please correct me in a Comment below.

WI’s balance sheet shows (for 2011) a liability of €66,432,000 and a balancing asset of the same amount; both of them are imaginary figures. Similarly, the income and expenditure account shows the amount that WI (in theory) should have paid in 2011 for the pension benefits that its staff accumulated in that year, along with an imaginary interest charge on its total liability. Those are then balanced by a figure called “Net deferred funding for pensions” which, at €4385000, is by far the largest component of WI’s “Other operating income”.

Obviously that lot would look better if it had corroborative detail to provide artistic verisimilitude, so the accountants or the pensions bods or someone did other calculations of currency translation charges and transfers in and out of the scheme and service costs and so on, all on a non-existent pension fund.

Now, as far as I can see, we can ignore all that. But there are two cash figures that are real and important:

  • one is that WI staff paid (was it under the public service pension levy? or something else?) €230,000 in contributions in 2011, for which they will receive benefits of €2,744,000, ie twelve times what they put in
  • the other is that in 2011 WI paid out €934,000 in actual pension
    benefits to people who had retired by then. That presumably includes
    any retirement lump sums.

Incidentally, WI’s 2011 accounts (the most recent available) make no mention of the North South Pension Scheme (see below), of which WI is a member. Perhaps the stuff in WI’s accounts is about its imaginary portion of a combined but equally imaginary fund under the North South Pension Scheme. The meetings of the NSPS CEO Pension Committee, which “exercises trustee-like functions” [seriously: see below], must be fun.

Not being an accountant (I feel I lack the necessary creativity), I am interested in the actual cost to WI of the benefits it pays out to folk who retire.

Retirements

I asked WI how many people retired in 2012 and 2013 and how many were expeected to retire in the next three years.

WI retirements 2012–2016

Figures for 2012 and 2013 are actual; those for later years are expected. Source: Waterways Ireland

Those who retired were:

  • 2012: 3 lockkeepers, 1 boatperson, 1 director of marketing, 1 mechanical fitter, 1 general operative [GO] plant operator B, 1 preserved pensioner
  • 2013: 1 chief executive, 1 clerical officer, 1 GO, 2 GO chargehands, 3 GO plant operator As, 1 GO plant operator B, 1 boatperson, 1 boatperson/skipper, 1 lockkeeper.

WI could not say what grades were expected to retire in 2014, 2015 and 2016. If they did, of course, I’d be able to guess which senior managers were about to retire; as it is, I have to rely on rumours. WI was able to predict the lump sum and pension payouts for 2014–2016, so I suspect it has a good idea who intends to retire.

The total number retiring in those five years is 81, which is about a quarter of the entire WI staff (currently 325). That’s a big proportion of the staff. No doubt it reflects the age profile of staff who transferred into the organisation but the figure may be boosted by the Hutton Push [see below].

Lump sums

Here is what WI expects to pay out in retirement lump sums in 2014, 2015 and 2016, and what it actually paid out in 2012 and 2013. Note the big increase in 2014. These sums are paid on retirement and are not recurring: in other words, they are made only to those who retire in the year in question.

Actual amounts for 2012–2013; predicted amounts for 2014–2016. Source: Waterways Ireland

Actual amounts for 2012–2013; predicted amounts for 2014–2016. Source: Waterways Ireland

If all lump sums are 1.5 times final salary [something of which I can’t be certain], then we can work out the total of the final salaries of the retiring employees.

Source: actual and forecast lump sum payments divided by 1.5

Source: actual and predicted lump sum payments divided by 1.5

And, as we know the number of people expected to retire in each year, we can work out the average final salary for each year.

Source:  estimated total final salaries divided by expected numbers of retirees

Source: actual and predicted total final salaries divided by numbers of retirees

It looks as if some senior staff may be expected to retire in 2014.

Annual pension payments

The lump sum amounts are paid only to those retiring in the year in question, whereas the annual pension payments include those to people who started drawing pensions in 2011 and earlier years. But the lump sums are once-off, whereas the annual payments will continue to increase as more people retire.

Source: Waterways Ireland figures for total pension pay-outs less lump sums

Source: Waterways Ireland figures for actual and predicted total pension pay-outs less lump sums

The effect on WI’s finances

The totals of the lump sums and annual pension payments show how much WI has to pay out in each of the five years.

WI totals of actual and predicted pension pay-outs

Totals of actual and predicted pension pay-outs. Source: Waterways Ireland

The figure shown in the 2011 accounts was €934000. By 2016, the total will be two and a half times that: €2377000.

Remember that this is an unfunded pension scheme, so the increase comes out of WI’s ordinary allocation of money from its sponsor departments. And that allocation will not be increased: both governments want to cut WI’s income, although one government wants to cut more than the other does. If the RoI government has its way, by 2016 WI’s income will be just under 66% of the 2010 figure: a cut of one third in six years.

According to the last available accounts, WI’s main cost is staff: €21,903,000 in 2011. But that figure includes €5769000 in pension costs, €934000 of which was benefits paid out while the rest was special magical imaginary payments to the pension fund; the real staff cost (excluding agency staff and employer PRSI/NIC contributions) was €14411000.

Between 2011 and 2016, the increase in pension costs means that an extra €1443000 has to be found and, as staff costs form the main element of WI’s expenditure, it is likely that the staff budget will bear much of the burden.

The Hutton push

One factor that may be prompting some WI staff to retire as soon as they can, thus pushing up the lump sum payments in 2014, is the possibility that some changes, recommended by the UK’s Independent Public Services Pensions Commission [the Hutton Commission], might be applied to the North South Pension Scheme that covers Waterways Ireland. On 30 April 2013 Martin McGuinness [SF, Mid-Ulster, Deputy First Minister] reported to the Northern Ireland Assembly on the North/South Ministerial Council [NSMC] institutional meeting held on the previous day.

Jim Allister [Traditional Unionist Voice, Antrim North] asked him about the pension scheme:

The pension scheme for those bodies entails lavish employer contributions. In one case, over 31% of salary is contributed by the employer and a mere 1·5% is contributed by the employee. When will that lavish squander be addressed by bringing the scheme into line with what exists in the Civil Service scheme? Is it good enough for it simply to be pushed back for another six months? Why not address it now instead of looking at it further down the road?

The ever-patient Martin McGuinness responded:

At the NSMC meeting on 28 March 2013, we noted that the NSMC approved an amendment to the North/South pension scheme, which means that increases to the scheme for benefits paid in the northern currency will be in line with the consumer price index. Prior to that, they were increased in line with the retail price index. The amendment ensures that the North/South pension scheme follows public sector pension policy, as agreed by the Executive.

We also noted that the two Finance Departments are in discussion about how to further amend the scheme. These amendments will ensure that northern members are not immune from pension reform. The first amendment will increase employee contributions on average from 1·5% by 3·2 percentage points. That will align with the employee rates payable from April 2014 in the principal Civil Service pension scheme here in the North. The second amendment will introduce, by April 2015, the wider Hutton reforms, such as the introduction of a career average revalued earnings scheme and a linkage between the North/South pension scheme age and the state pension age.

The scheme was raised in the Dáil on 17 December 2013 in a written question to the Department of Public Expenditure and Reform.

Dara Calleary [FF, Mayo] asked the minister:

[…] the discussions he has had in relation to the North/South pension scheme; if the proposed amendment rules as notified from officials in the Department of Finance and Personnel and his Department will apply to southern based employees of Waterways Ireland; and if he will make a statement on the matter.

The minister, Brendan Howlin [Labour, Wexford] replied:

Five of the six North/South Implementation Bodies, including Waterways Ireland, along with Tourism Ireland, operate the North/South Pension Scheme (NSPS). The Scheme is unique in covering public sector staff employed on both sides of the border; staff of the affiliated employers in this jurisdiction are automatically members of the Scheme. The Chief Executive Officers of the relevant NSPS bodies and Tourism Ireland meet as the NSPS CEO Pension Committee, which exercises trustee-like functions in relation to the Scheme.

As Minister for Public Expenditure and Reform, I am jointly responsible, along with the Northern Ireland Minister for Finance and Personnel, currently Mr Simon Hamilton, for the rules of the North/South Pension Scheme, and in particular for approving amendments which may be proposed to those rules. In exercise of my responsibilities in relation to the Scheme, I and my officials have engaged in correspondence and discussion about reforms to the NSPS rules with my counterpart Northern Ireland Minister and his officials.

Review and reform of existing pension arrangements, including public sector pension arrangements, has been an ongoing feature of the pensions landscape in Ireland and the UK over recent times. In this context it is natural that reforms to the North/South Pension Scheme would arise for consideration, and proposals in this regard have been discussed with the NSPS CEO Pension Committee.

Pending further development of these proposed reforms, and mindful that there is ongoing discussion with trade union interests on the proposed changes, I do not intend to elaborate at this juncture on the possible final specific content of the rule amendments which may arise. I can however confirm to the Deputy my intention that the changes will, to the extent that is consistent with legal norms in each jurisdiction, apply to southern and northern NSPS members alike, including staff of Waterways Ireland in this jurisdiction. This uniformity of application would reflect the fundamental all-Ireland character of the Scheme, to which successive Governments have been committed.

That doesn’t tell us much about the likely effects on the take-home pay of WI staff, or the pensions and lump sums of retired staff, and I have no inside information about what is proposed or likely. But you can see why WI staff who are near retirement age might be tempted to get out before their conditions are worsened.

 

DCAL, DAHG and WI

I was interested to see that DCAL has its own research programme [DOC file], but also makes use of other research services including the NI Continuous Household Survey:

To monitor engagement in culture and sport in Northern Ireland

The Continuous Household Survey (CHS) and the Young People Behaviour and Attitudes Survey (YPBAS) will continue to monitor engagement in sport, arts, museums and libraries in Northern Irelandfor adults and children. The CHS will also capture engagement by people in Northern Irelandat fisheries and waterways under DCAL’s control as well as engagement in Irish and Ulster-Scots languages and events. The barriers and benefits to engagement will also be explored.

DCAL and non-navigaBLE Waterways

I don’t know whether “waterways under DCAL’s control” are deemed to include those managed by Waterways Ireland as well as those directly controlled by DCAL:

The Department also has ownership of, and custodial responsibility for, those remaining sections of the Lagan and Coalisland Canals that remain in Government ownership following abandonment of navigation in the 1950s. An ongoing programme is in place for each of these highly popular towpaths to upgrade access for pedestrians, cyclists and disabled access.

I don’t suppose it would make much sense to ask questions about just two derelict waterways while ignoring those that are navigable, but the results are not shown on the CHS web pages: interested folk must ask DCAL direct.

I note that the DCAL Resource Accounts for the year ended 31 March 2011 [PDF] show that DCAL “Estimates provided for expenditure on […] certain inland waterways (including payments to the Rivers Agency), Waterways Ireland, […].” Later, we read:

Inland Waterways

DCAL manages and maintains 11 miles of the Lagan Towpath from Stranmillis to  Sprucefield; 3.5 miles of towpath at Soldierstown, Aghalee; 4.5 miles of towpath on the  Coalisland Canal; 22 water recreation sites; and shooting rights over the foreshore of Lough Erne. Work on the development of a policy on the re-opening of abandoned canals is in the preliminary stages.

Given that DCAL can own and run waterways, I wonder why the supporters of the Newry Canal did not seek to have it taken over by DCAL rather than by Waterways Ireland.

Water recreation

The non-navigable waterways are the second of DCAL’s three main activities. The first is this:

We are committed to developing the recreational potential of inland waterways through our Province-wide Water Recreation Programme.

Applicants, such as Local Authorities, are encouraged to work in partnership with the Department in providing and promoting water recreation facilities such as riverside paths and boat moorings for public use. Wherever practicable, works will incorporate disabled access facilities.

Again, the DCAL Resource Accounts for the year ended 31 March 2011 [PDF] provide more details:

Inland Waterways

[…] The Department continued to administer an annual Water Recreation Programme, amounting to £430k in 2010-11, aimed at developing the recreation and navigational potential of Northern Ireland’s Inland Waterways. Applicant organisations, primarily local authorities, were encouraged to work in partnership with the Department in the provision of water recreation facilities, such as riverside paths and canoe trails, complementing the Department’s continued commitment to upgrading the Lagan and Coalisland Canal towpaths for shared pedestrian and cyclist use. 9 new projects were completed during 2010-11. Funded projects were required to have an identifiable strategic value and where possible, contribute to the Department’s commitment to provide at least 5 kilometres of new or improved access for disabled persons each year.

This too would cover cooperation with the four local authorities who control the Newry Canal.

Oddly enough, inland waterways and fisheries are grouped together on DCAL’s website but they are in two separate divisions: waterways, for some reason, are in Culture whereas inland fisheries come under Sport, Museums and Recreation. DCAL does not, however, put waterways under southnorthery.

DCAL and DAHG

There is a useful contrast here with DAHG, which thinks that waterways exist purely to serve northsouthery: despite what WI thinks it is for

Waterways Ireland has responsibility for the management, maintenance, development and restoration of inland navigable waterways principally for recreational purposes.

… DAHG does not appear to have adopted the view that waterways are for recreation. Perhaps if it gained responsibility for some waterways outside WI’s scope, eg by taking over the Maigue from the Office of Public Works, it would develop a policy on recreational use of waterways.

That would mean that, like DCAL

The Department is also the sponsor department in Northern Ireland for Waterways Ireland which is the Cross-Border Body responsible for the management, maintenance, development and restoration of operational waterways throughout the island of Ireland.

… DAHG would be the department responsible for recreation on waterways, one (large) set of which are managed by WI, which in turn is controlled by the two departments.

The difficulty with DAHG’s current arrangements is that there is a division between theory and reality, but DAHG has organised its functions on the basis of theory. In reality, waterways are for recreation (or, if you prefer, leisure), but DAHG insists that they’re for northsouthery. Because that’s now been successfully routinised, waterways receive relatively little attention and are not, as far as I can see, considered as part of state provision for leisure or recreation. There can be no proper policy-making for the sector unless it’s grounded in reality.