We use Google Analytics to see which pages are read and how the site is used, so we know what to improve. This only runs if you accept. See our privacy notice for details.

Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Benefacts closure

Summary

Deputy Murphy criticised the Department’s decision to end funding for Benefacts, arguing it provided valuable transparency on the non-profit sector and that the Department ignored evidence. Minister McGrath said Benefacts was an external body, not part of the public sector, and the decision followed a value-for-money assessment and alternative providers were examined.

Since the Department of Public Expenditure and Reform pulled the plug on Benefacts, a name that will not be familiar to many of the public but that provided a valuable public service, I have been trying to figure out exactly what the Department has against open, transparent and comprehensive data. Benefacts was set up in 2014 at the request of the Department to provide transparency on the financial affairs of Ireland's mammoth €14 billion not-for-profit sector. For the first time, detailed audited financial and governance information on 34,000 non-profit organisations, which have 165,000 employees, was collected and collated in one place. Best of all, the website was open to the public and free to use.

An aspect of the work Benefacts did was to provide detailed information to the CSO that enabled it to fulfil important statistical reporting required under EU legislation. Ireland had availed of a derogation when it came to supplying detailed information about the not-for-profit sector to EUROSTAT until September 2017 when we ran out of road and the derogation ended. Benefacts was then able to step into the breach and spare the country's blushes by providing the CSO with quarterly reports at no charge with comprehensive data that was gleaned, amalgamated and digitised.

We all know there is a huge number of voluntary organisations, some of which provide health and social care services. Many of them receive substantial funding. For the first time Benefacts enabled the CSO to identify all 779 such entities and their various sources of funding. This allowed the CSO to capture all of the non-HSE income and expenditure for inclusion in the health accounts system. This ensured the Estimates on health expenditure in Ireland were comprehensive and accurate. In short, Benefacts allowed the people who used it to follow the money.

Now, without warning, the Department has pulled the plug and spent €250,000 shutting it down, having spent €6 million of public money establishing it. Its funding has been scrapped, the not-for-profit company has been wound up, its employees have been made redundant and the website is no longer available. This is despite a report commissioned by the Department from Indecon stating the benefits of Benefacts exceeded its costs. It also said that scrapping the service would reduce information needed for effective governance. Whose interests does this serve? We have a huge not-for-profit sector worth €14 billion. Does the Minister agree that it is a no-brainer to have detailed transparent financial information available? It is not too late to reinstate this. There are costs associated with duplicating the service and not providing EUROSTAT with the information it requires.

Comment on this

I thank the Deputy for raising the issue of Benefacts. It is important to put on the public record that Benefacts was not a public service body so it was not in the public sector family. While the State provided funding for the organisation for a number of years, it was not running the organisation. It was an external third-party body, which delivered a good service during its lifetime and there is no question whatsoever about that.

As the Minister for Public Expenditure and Reform, I had a clear recommendation from within the Department following an examination that Benefacts did not constitute value for money and that the business case for its continued public funding did not stand up, and it was a matter for Benefacts to identify and source other potential revenue sources to ensure it could continue in existence. The Department consulted other Departments that we thought might have a use for the service provided by Benefacts, or a use for the information that it collated and presented on its website. We did not find any other public service body or Department in a position to take on the relationship to fund Benefacts because, in essence, they did not see value in it.

The Deputy would be first to call the Accounting Officer of the Department of Public Expenditure and Reform before the Committee of Public Accounts if he ignored a recommendation to close down over a period public funding for the body. As I said, we consulted with a range of organisations, including the Department of Rural and Community Development, which has a key role in this area. As the Deputy knows, there has been significant investment in the Charities Regulator. Much more information is collated and presented by the Charities Regulator and the CSO.

As Minister, I received a recommendation that public funding for this third-party body no longer constituted value for money and, therefore, should be discontinued. This was the essence of it. I very much believe in open government. I am the Minister currently undertaking a comprehensive review of the freedom of information legislation. I believe it will result in legislation coming before the House in the months ahead that is not about narrowing its scope or restricting its operation in any way but will broaden it out and ensure it operates much more efficiently and meets the needs of service users who want to access public information held by the Government or other public service bodies.

Comment on this

We had the Secretary General of the Department before the Committee of Public Accounts and I took the opportunity to speak to him about this. I raised the issue of the report the Department commissioned from Indecon. Before he closed it down, I asked him whether he had read the report and he told me he had not, which I thought that was quite extraordinary. He said he had got a briefing on it. It is not a particularly long report. Having read it, it would not suggest the cost outweighed the benefits; in actual fact, it is the opposite. This is a report commissioned by the Department that cautioned against shutting down something for which there was no replacement. Money is being spent by the Department of Rural and Community Development, which is at an early stage in creating an alternative system that would be more limited. The Minister's predecessor at the Department was glowing about it several years ago. It is on the record. I find it extraordinary that a valuable resource has been dispensed with that provided very comprehensive and transparent information.

Comment on this

I did not come to the debate with a fixed view. I received a clear recommendation based on an assessment of value for money and the business case. The recommendation made to me as Minister was that we could no longer stand over spending public money on a service that was matched by other public bodies. We reached out to other public bodies, some of which the Deputy has mentioned, including the Department of Rural and Community Development, to see whether they had a requirement for the information being provided by Benefacts. We must bear in mind that Department is the key line Department with overall responsibility for the not-for-profit voluntary charity sector. It did not see a value in the State continuing to extend resources to a third-party body in this respect. It felt it was doing something similar. My preference is always that this type of work and service should be provided from within the public sector. This was the thrust of the recommendation I received. I read all the supporting documentation, I supported the conclusion and, therefore, I made the decision.

Comment on this