asked the Minister for Finance the progress to date on changing the system whereby subventions from the European Regional Fund are paid directly into the Central Fund and not necessarily reallocated to the projects specified.

The regulation governing the regional fund allows member states the option of using contributions from the fund either (i) to supplement the national aid granted to the project in question; or (ii) as a partial repayment of national aid, on the basis that fund assistance is used to supplement the overall regional development efforts of member states.

As the Deputy is aware, it is the second of these methods which has been used in Ireland, receipts from the fund being applied to the financing of increases in the Public Capital Programme.

I am concerned that arrangements for the administration of the fund should be such as to demonstrate clearly that moneys received are used to finance additional investment, especially in the areas of greatest need.

Following the adoption of the new fund regulation last February, my Department has completed its review of the existing arrangement and possible alternatives. Arising out of this review I have given instructions that certain changes be made in the way receipts from the fund are accounted for in the Public Capital Programme: the summary of the programme will in future identify receipts from the regional fund as a separate source of finance alongside the other Exchequer and non-Exchequer resources. The tables giving details of the outturn and estimates of expenditure on the individual services included in the programme will identify that portion of expenditure financed by fund receipts. The introductory notes on the programme will also explain in greater detail the EEC provisions governing the use of fund receipts by national authorities and the way these provisions are applied in Ireland. As a result of these changes it will be possible to identify more clearly the way in which fund receipts are used to supplement national efforts directed towards regional development.

The Minister, replying to a similar question some time ago, indicated that he would be in favour of the first method to which he has just referred in his answer. I understood him to indicate that. Is he now saying that he is adopting a line closer to that method, or is he adhering to the old method, the second one he mentioned in his reply?

The Deputy may not be quite accurate in what he said at the beginning of his question. I think I have indicated on a number of occasions that what I was anxious to ensure was that the accounts demonstrated as clearly as possible what money was received from the regional fund, the purpose for which it was used and also demonstrated that it was in addition to the money being made available internally by the Government. The changes I have just indicated should go a long way to achieving that objective.

Would the Minister feel that the method we have used in the past has been a hindrance to our getting more money from the regional fund, in not actually allocating money directly to specified projects?

I am not aware of any evidence that the method of accounting we used has operated to prevent us getting more money from the fund; I have no evidence of that. My concern in this regard was primarily with demonstrating to our people what was happening with the regional fund and that, to be quite blunt about it, it was not being used by this or the previous Government, as a cover up for Government failure to supply adequate funds for capital investment of one kind or another. I think the changes I have indicated will help to demonstrate this clearly. But I must repeat that I have no evidence whatever to suggest that the method of presentation has prevented us from getting money from the fund.