OPINION: The Government must face a reckoning for its mishandling of our money

The report of the Comptroller and Auditor General (CAG) is not a compelling or exciting read. Published every year, the CAG provides independent assurance that public funds are used in accordance with the law, managed to good effect and properly accounted for. Shareholders of private companies pay attention to their annual reports and get angry if performance is poor or dividends low. However, “shareholders” of this state pay little systematic attention to the national audit.
While rules governing audits are strict, think back to the positive audit of Anglo-Irish Bank in 2007 just before that bank collapsed spectacularly and dragged the rest of the economy down with it. The reconfigured bank, IBRC, sued auditors Ernst & Young for more than €50 million damages over losses allegedly resulting from Ernst & Young’s ‘repeated failure’ to uncover alleged ‘highly unusual and improper’ loan transactions. Parties involved reached a compromise on confidential terms, so we never got to the truth.
Countries can be classified on a spectrum ranging from high tax/high expenditure to low-tax/low expenditure. Politicians love the low tax/high expenditure scenario, but alas, we all know how that ends up.
The Swedish tax burden is 48 percent of its GDP, and expenditure is the same. Figures for the UK are similar. The high quality of public services in Sweden compared to the UK suggests that the UK gets less value for its money.
In the US – widely believed to be ideologically driven towards small government – the figures are 32 percent and 36 percent. In Ireland, tax revenue is 30 percent of national income and expenditure is 32 percent, using the appropriate measure. So Ireland has a similar configuration to the US, and is a distance from Sweden.

Disquieting trends
Reading the CAG’s report, one is interested to see if the Irish State is getting value for the expenditure of the 32 percent of national income it manages. However, the CAG does not examine the effectiveness of total expenditure. He merely selects a small range of topics that stir disquiet in his mind. There are 15 in total, but let me select two.
The first issue concerns ‘Delivery of rapid build housing’. This was designed to accommodate refugees fleeing from Ukraine after the February 2022 invasion by Russia. Ireland was generous and took in over 104,000. While most were accommodated in hotels, community centres and private houses, it was decided to build 654 modular units on specially prepared publicly owned land for an expenditure that escalated to €289.3 million, a cost per unit of €442,000 and a completion date of April 2025.
The programme evolved in a confused way, with the modular homes manufactured quickly, but the site provision and preparation chaotic. The homes were quite small (less than 50 square metres) and although intended to have a BER rating of A2, they ended up with a rating of C1. By comparison, the median price of a conventional house in 2023 was €320,000, and few would be as small.
The second issue concerns ‘Appraisal of rail project investments’ and dealt with the Dublin MetroLink and the Limerick-Foynes rail-line restoration. The most astonishing finding by the CAG was that prior to 2022 there was a write-off on three MetroLink preparatory projects of €225 million of Exchequer funding. The current estimated MetroLink cost could be as high as €12.3 billion, yet the CAG was mainly pleased that it was compliant with the Public Spending Code (ie, all regulatory approval boxes had been ticked).
This was not the case for the Limerick-Foynes restoration, a two-phase project to be completed in 2025 at a cost of about €200 million. (MetroLink is likely to cost over 600 times more!) It is well known that many government Departments have displayed scant enthusiasm for Western Rail Corridor-related restorations. Iarnród Eireann, with a reputation for engineering excellence and bringing projects in on time and on budget, managed this modest, shovel-ready project that had potential of opening up a dynamic new Atlantic port at Foynes. Yet these efforts, of vital concern to the western region, were severely criticised by the CAG for box-ticking failures and not on strategic grounds.

Trust issues
We depend on government bodies to exercise judgement when costing and managing expensive public projects rather than having the CAG pointing out problems ex-post. The increasing reliance on external consultants has weakened government. Mountains of rules and regulations introduced to prevent any recurrence of past failures have now generated new kinds of failures inherent in the complexity and rigidity of the rules.
The report put out by the OPW (‘Review of the Covered Bicycle Parking Project: Leinster House’) contains the following confession:
“As Accounting Officer for the OPW I acknowledge that, while the costs for this project (€335,000) can be explained, the overall cost of delivering a covered bicycle shelter at Leinster House is completely not acceptable in the wider context of value for money and value for the tax payer. It is an extraordinary cost for the provision of a covered bicycle parking facility and one which the OPW has to seriously reflect on.”
Can we trust a government that cannot build its own bicycle shed at a realistic price while deliberately leaving the Northern and Western region without decent rail links?
Should we be telling them to get on their bikes and look for work?
•   John Bradley is a former ESRI professor and has published on the island economy of Ireland, EU development policy, industrial strategy and economic modelling.