Digest – August 6 2010

Late but like, wahevz. As my 16 year old cousin may say.

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Markham Nolan is blogging his way through east Africa while on a Simon Cumbers Fund media funded. Would make a lovely short-term column, I say.

Monopoly houses set to float down the Liffey, Dublin Observer reports.

Ciaran Cuffe advocates property tax in blog musing, according to the Sunday Tribune, then deletes the post. It’s still in the Google Cache though, his exact words were…

A huge challenge over the coming months is how we close the gap between the State’s income and expenditure. Either way it looks as though we have to narrow the budget gap by another three billion euro next year. An additional increase in income tax on working families would be hugely challenging, and perhaps we should instead be considering some kind of domestic charge, as we had prior to the ‘give-away’ budget of 1977.

There’s no easy way to fill the gap, but an alternative to a hike in income tax rates on middle income earners would be to take the radical step of abolishing (or dramatically reducing) stamp duty on homes and introduce an annual levy based on the size of the house. Maybe large homes could pay €600 a year, medium sized home €400 and smaller home €200. How would you define this? A home over 200 sq.m might be at the larger end of things, and under 100 sq. m could be in the smaller category. It all could be done by self-assessment. If home-owners couldn’t pay, then the levy could remain as a charge on the home when it eventually changed hands.

I’d say such a charge could raise the guts of several hundred million, and would be more equitable than a rise in income tax. The beauty of such a scheme is that it could be implemented quickly without a cumbersome State led assessment of each property. Another advantage would be that it would allow people to move home when they wish without an excessive tax burden.

Story from last week; ‘Nama to decide on future of funding for Anglo building‘.

Anglo HQ, Docklands

Alternative headline, ‘Nama to decide on completion of half-built office block owned by tax-payer in centre of mass of empty office blocks’. Leave it as it is and turn it into a museum. Primary school classes can take tours around it as guides explain in hushed tones about the extinct species of property agents and Celtic Tigers. ‘A monument to folly’, as Gav christened it as we walked past it one night.

McGarr on regulators.

Stephen Kinsella on the transformation of private debt into public debt.

Gormley, incinerators and the constitution. PucktownLane has an interesting take.

Karl Whelan; Anglo’s plan to save sub-ordinated debt holders.

WORLD Continue reading “Digest – August 6 2010”

FAS funds and SIPTU/ICTU

On the subject of:

THE TÁNAISTE Mary Coughlan yesterday sought to play down a controversy with the European Commission that has brought a halt to the claiming of tens of millions of euro in European Social Fund payments.

Her department confirmed that a claim for €57 million spent by Fás on training and which was to be repaid by Europe, was withdrawn because of issues raised by European audits.

A prominent trade unionist has criticised a call for FAS to be shut down:

The Labour Party’s spokesman on education, the former minister for labour Ruairí Quinn, has called for Fás to be “shut down” as a result of this latest blow to its credibility. He said some of its budget should be transferred to educational institutions such as institutes of technology.

This sparked an angry trade union reaction from Siptu and Ictu president Jack O’Connor who is also a long-time member of the Labour Party’s national executive.“Ruairí Quinn was undoubtedly the best minister for finance in my lifetime but he is totally and completely wrong in his call for closing down Fás,” Mr O’Connor said.

Total amount SIPTU College received via the FAS Competency Development Programme (CDP) (2003 to 2008 inclusive): €2,068,571.6

Total amount ICTU received via the FAS Competency Development Programme (CDP) (2003 to 2008 inclusive): €2,460,274.73

Total for SIPTU and ICTU: €4,528,846.33

SIPTU and ICTU were two of the top 10 recipients of FAS CDP money from 2003 to 2008.

I think maybe Mr O’Connor should have mentioned these figures.

HSE briefing papers Sep 09 to Jun 10

Some time ago I sought all briefing papers used by HSE staff for appearances before Oireachtas committees between September 1, 2009 and June 14, 2010, inclusive.

Here are seven sets of them:



Search and retrieval: €29,141.45

Four weeks ago I sought what I believed to be reasonably standard information from the Department of Enterprise, Trade and Innovation (DETI). Among the things I sought were:

The appointments diary of the Minister for 2008 and 2009.

All speaking/talking points prepared for the Minister from January 2009 to July 2010, inclusive.

The FOI requests log for the Department from January 2007 to July 2010 inclusive. This should include the requestor, what was requested, the date of the request, and any other information recorded.

An export of the expenses database of the Department. I understand the Department uses Oracle iExpense to record expenses data.

I often ask many Departments for similar information, so I have some understanding of how these records are held, and the amount of work involved in releasing them. I have sent almost identical requests to other Departments, and been charged little or no search and retrieval fees (under the Act, a public body can charge €20.95 an hour to find and retrieve stuff). But never before have I received a fee request as big as this one from DETI:

€29,141.45

A record for thestory.ie.

This was broken down as follows, for each part in turn:

1) 1 Staff, 10 Hours, €209.50
2) 45 Staff, 1,310 Hours, €27,444.50
3) 1 Staff, 7 Hours, €146.65
4) 4 Staff, 64 Hours, €1,340.80

So to be clear, let’s take each of these in turn.

1) The Department believes it would take one staff member 10 hours to print out or photocopy the appointments diary of the minister over two years. We believe this diary is held electronically, so they are saying it would take one staff member 10 hours to click “print”. Even if it was held in hard copy, it does not take 10 hours to photocopy (most Ministerial diaries are well under 150 pages per year). The Department cannot charge for the time it takes to redact information. As readers are aware, we have ministerial diaries from other departments covering many years, we have never been charged for these.

2) The Department claims that: “These records are maintained by individual Business Units in the Department who are responsible for preparing the notes in question for the Minister. As you can appreciate, the remit of this Department is so wide and covers so many areas, that the retrieval of speaking/talking points for the Minister for the 19-month period covered by your request would involve the examination of over 900 files, containing several thousand records.”

However we have previously been issued with speaking notes for one media appearance that was collated into one document, and given a heading. We will explore this further. But we do have in mind that most if not all documents are stored electronically.

3) Most Departments hold their FOI requests log in the form of a spreadsheet. So again, I’m being charged €146.65 for clicking “print”. If it’s not a spreadsheet then it’s a hard copy containing the name of the requestor, the date of the request, what was requested and sometimes other information. At most, such a log would contain a few dozen pages. Again, charging €146.65 for this information is nothing short of ludicrous. How it would take one staff member nearly a fully working day to perform this task is beyond me.

4) I’ve been down this road with other public bodies. Exporting a database actually requires no search and retrieval time whatever. It is simply a matter of exporting the data to a spreadsheet. Any other requests seeking Oracle data has not incurred a charge from any other Department. How it would take four staff 64 hours to export from a database is again beyond me, especially given the fact that such processes are automated.

A reader I met recently didn’t realise just how much time and resources it takes to get information out of public bodies. This is only one example. I will be contacting the Department to either clarify my position, or appeal for internal review on the fee alone. And even if my €75 appeal is successful, I don’t get the €75 back. That’s fair, isn’t it?

Front Line funding

We note that Denis O’Brien’s charity Front Line did not receive European Commission funding last year. In figures recently released by the Commission, Front Line does not feature for 2009, despite appearing as a recipient in 2008. That year, Front Line received €1,801,679 from the European Commission.

But he will no doubt be cheered with the €450,000 the charity received in 2009 from the Department of Foreign Affairs, and the €450,000 also received in 2008. There is no sign yet of Foreign Affairs giving money to the charity for 2010.

Hegarty on Anglo

Rare that we’d link to a non-biz/current affairs commentator around these here parts but Shane Hegarty, arts editor of The Irish Times, has a cracking column on Anglo this morning in Weekend Review. More please.

On Monday Anglo Irish Bank revealed that its latest half-year losses amounted to roughly the same as it would cost to rent a black hole and throw the country into it. At the same time the bank admitted that it was beginning an internal investigation into the overcharging of customers by as much as €50 million.

A few years ago this would have been a lead story, a match to ignite the parliamentary hot air. This week? It was an addendum, an “and finally . . .”, just another pile of cash to throw on the green-tinged pyre. It seemed, in the grand scheme, almost inconsequential. After all, it would amount to a mere 164th of the total losses – or just over 0.6 per cent. It is a throwback to the days when we were faced with figures we could almost understand. But now it is a pittance. Sure, you’d pay that off in half a generation.

It is a reminder of just how vast the scale of the Anglo money pit now is. How mind boggling. Once again the media rightly spent a good deal of time trying to put the cost into some kind of context – how many space shuttles you could buy, that kind of thing – but there is an argument that no amount of analogies or graphics or football pitches full of imaginary money can ever truly get the scale across to the average brain.

Tightly articulated, really need to read it all.

Johnson, Boone, Kinsella

In case you missed it yesterday, Peter Boone and Simon Johnson (former IMF chief economist) of Baseline Scenario and The New York Times on Ireland…

Until very recently, Ireland was seen as Europe’s poster child of prudent reforms. Mr. Trichet himself highlighted Ireland as an example that Greece and other financially stricken nations should follow. His message was simple: If only Greece, or Portugal or Spain would cut public wages, reduce the budget deficit and make structural reforms as Ireland has done, then growth could occur and default prevented.

However, it is now apparent that Ireland has not done enough to stem its march toward further crisis. The ultimate result of Ireland’s bank bailout exercise is obvious: one way or another, the government will have converted the liabilities of private banks into debts of the sovereign (that is, Irish taxpayers), yet the nation probably cannot afford these debts.

[…] Ireland, simply put, appears insolvent under plausible scenarios with current policies. The idea that Ireland, Greece or Portugal can cut spending and grow out of overvalued exchange rates with still large budget deficits, while servicing all their debts and building more debt, is proving – not surprisingly – wrong. Such policies leave nations burdened with large debt overhangs that effectively tax businesses and borrowers – because interest rates must stay high to reflect risk.

Ray Kinsella is worth reading in today’s Irish Times too.

IN THE absence of transformational economic and social policy changes, a sovereign debt crisis is now all but inevitable. Whether such a crisis would ignite, or be part of, a more generalised crisis in the euro zone is not yet clear.

Oh… and FT Alphaville describe nicely the happy merry-go-round that is Nama

Nama haircuts have been increasing, which means Irish taxpayers save on Nama expenses, but banks receive less in Nama bonds. That in turn, means they have less to pledge at the ECB’s liquidity facilities, and puts further pressure on Ireland’s financial sector — just as the banks need to refinance.

As well as picking up on a BNP Paribas note on Nama…

For this system to work, the ECB must provide unlimited access to its refinancing facilities. A couple of weeks ago, ECB’s Weber surprised markets by suggesting that unlimited access to ECB funds should be extended until the end of the year. The motivation for Weber’s intervention is that he wants to defend German interests. What Germany fears most is the activation of EMU’s EUR440bln rescue package. Once activated it invites abuse in the hope that surplus countries such as Germany will ‘pay the bill’. EURGBP longs remain our favourite trade.

S’fine though honest… it’s just a little banking collapse, it’s still good, it’s still good. It’ll be the cheapest bailout in history, we’re still good, we’re still good…

Anglo and Lehman

A common refrain heard from representatives of the Government is that Anglo Irish Bank had to be saved in September 2008, else it would have brought the entire banking system down with it. Government ministers consistently and still come on air to tell us that Anglo was systemically important and that we had to save it. Just look at Lehman Brothers, they say, look at the disaster Lehman caused.

Yes Lehman collapsed. Is the US better or worse off as a result, two years laters?

Ben Bernanke, the Fed chairman, has said something rather interesting in the context of Lehman:

“I regret not being more straightforward there because clearly that has supported the mistaken impression that, in fact, we could have done something. We could not have done anything.”

Bernanke told the Financial Crisis Inquiry Commission that any loan the Fed could have provided Lehman would not have stopped a run on the bank by customers.

“If we lent the money to Lehman,” Bernanke said, “we would have saddled the taxpayers with tens of billions of dollars in losses.”

So if the US government had saved Lehman, it would have saddled taxpayers with tens of billions of dollars in losses.

Except in Ireland, we did save our Lehman, leading to tens of billions of euros in losses for the taxpayer.

And what have we got to show for it?

The Ballydowd facility for troubled teens

In the 1994 the courts declared that disruptive children had a constitutional right to be cared for by the State to a suitable standard. By 1999 a High Court judge, Mr Justice Kelly, found that “culpable time-wasting” in the department of health and children had resulted in this care remaining unavailable. He said the problems of accommodating such children had daily become more acute.

At that point the department had plans to bring a 24 bed custom-built unit on stream by early 2000. It was to be the first in the history of the state. The health-board run facility located in Ballydowd, Lucan, opened in mid-2000 but with only at one-third of its 24 bed capacity, due to difficulties with sub-contractors and recruiting suitable staff.

12 months later and the problems remained. The health board began seeking staff from abroad to allow them to open the remaining empty beds.

Six months later; the facility was facing a ‘crisis’ after a spate of resignations.

The South-Western Area Health Board (SWAHB) has rejected claims by one former staff member that the unit, at Lucan, was on the verge of “collapse”. But a spokesman admitted that it faced an “extreme challenge” to operate as originally intended, adding: “Failure is not an option.”

[…] Plagued from the start by recruitment difficulties, it has never been able to deal with more than eight children at a time. The latest resignations, of as many as six childcare staff, mean the unit is relying on agency personnel to continue to operate even at the current level.

In early 2003 the situation hadn’t changed. Still just 8 individuals were being cared for when Ballydowd should have been catering for three times that number. Teenagers with pyschological issues causing them to become aggressive were being sent to Mountjoy prison as beds in Ballydowd remained unavailable due to staff shortages.

By early 2005 there were 14 young people housed there, some as young as 13 years old. Despite there being teens who were being referred to Ballydowd by the courts, the HSE was unable to provide suitable care and instead was attempting to place them elsewhere. This included seeking to place children in the care of their parents, many of whom had originally sought help from the State due to their child’s conditions…

The case of a 14-year-old boy who has tried to kill himself three times is to be brought to the High Court for a judicial review in an effort to compel the Health Service Executive (HSE) to provide him with therapeutic help.

A psychological and educational assessment of the boy took place in the centre, which recommended that he should go to Ballydowd special care unit, a secure therapeutic residential unit.

[…] Nicola Carr, a court officer with the Special Residential Services Board, told Judge Ní Chondúin yesterday that the Finglas Child and Adolescent Centre had recommended a residential therapeutic care unit.

However, she added that the HSE has not provided a placement and has not made an application for the boy to be admitted to the Ballydowd special care unit.

In February 2006 it emerged that management had failed to act on fire safety advice provided following an inspection by experts…

A recommendation to improve fire safety procedures at a special care unit in Dublin for troubled young people detained on foot of court orders had still not been acted on when the centre was inspected 11 months later, according to a new report.

[…] a recommendation was made that senior managers should consider adapting bedroom doors in the centre so they opened outward. Fire blankets in the corridors between bedrooms were also recommended. “Neither recommendation was implemented,” the inspectors said.

They were concerned because in the year before the inspection by personnel from the Irish Social Services Inspectorate (ISSI) a young person had set fire to clothing inside her bedroom and was able to barricade herself in because the door opened inwards.

Come November last year and a HIQA report was recommending that Ballydowd be shut down “as a matter of urgency”. There were “serious concerns” for the welfare and safety of children due to “difficulties in the management of staffing and the physical environment”. The building had deteriorated to such a degree that it was “no longer an acceptable premises in which to detain children.” The HSE said its would set up a special project team to oversee the closure of the facility.

At that point there were 12 children housed there.

In February of this year the director of Ballydowd turned a fire hose on one of the children after she refused to get out of bed. Despite a HSE investigation concluding that the treatment could not be categorised as abuse under their guidelines, the individual did face assault charges after officers from Lucan Garda station received a complaint.

On August 2 of this year, exactly one month ago, the HSE was still planning on placing children in Ballydowd, despite the prior damning HIQA report.

Two days ago a further HIQA report again insisted that Ballydowd be closed, this time “with immediate effect”. However, the HSE says it will remain operational for a further 18 months until they can find elsewhere to house the children currently occupying beds. This HIQA report stated explicitly that “notwithstanding the demand for placements, inspectors were concerned that special care was currently being provided in two unsuitable, inadequate settings which do not meet required standards”. The Lucan facility “represents an unsafe situation for the children placed in special care units”.

And that’s where we currently stand.

10 years of Ballydowd, right on the back of the Celtic Tiger. Apparently never up to full standards.

How a custom-built unit – constructed just ten years ago, at the time apparently the only such building designed for the purpose in the State – could have deteriorated to such an extent that it is no longer fit for purpose, raises serious questions about the quality of the original work. I assume there was a tender process and a tender analysis completed. Is ten years a standard burn-out time for a building with this purpose?

One also wonders if Ballydowd has ever operated at full capacity, despite the consistent demand for treatment. I’ll see what I can find out in morning…