State Agencies

Overview I

There are a significant number of State agencies and bodies which perform various governmental functions and services.  State agencies deal with a wide variety of matters.  They may be State-sponsored companies or bodies established by law.

There are both commercial and non-commercial State-sponsored bodies.  Commercial State-sponsored bodies are or are equivalent to commercial businesses.  Some have been sold by way in the past, such as Telecom Eireann.

There are several hundred State agencies. Three-quarters of state bodies are non-commercial.   North-South implementation bodies implement policies agreed at North-South Ministerial Council.  This includes food safety, promotion, trade and business development, North-South language body and the Waterways Agency.

Commercial State-sponsored bodies include entities such as ESB, Bord Gais, Dublin Bus, RTE.  Non-commercial include IDA, Enterprise Ireland.  There are advisory bodies such as NESC and the ESRI.  There are regulatory bodies such as the Commission for Energy Regulation, Aviation Regulation, Veterinary Council and Medical Council.  There are statutory bodies such as the Director of Public Prosecutions.

State bodies’ powers and authority are defined by the legislation under which they are established. Their staff are not civil servants and their status is provided for by the relevant legislation.  Generally, the relevant Minister with the consent of the Department of Finance appoints the members of the officer board of the bodies.  The bodies operate under the general control of its board or its equivalent. There is usually a Chief Executive Officer, other officers and employees.

Overview II

Many State bodies have been established to deak with specific issues over time.  Regulatory agencies regulate particular areas. They may conduct research, provide information, promote economic development or pursue some statutory objective.  Agencies are generally free to adopt the appropriate structures for their duties.

State agencies have been reorganised, amalgamated and changed over time.  Some have been transferred back into government departments.

Commercial state-sponsored bodies provide goods and services in the marketplace.  Originally, many were organised as monopolies where private sector investment did not have the resources or ability to perform.  Aer Lingus, Bord na Mona, Bord Gais, An Post, ESB, Irish Life Assurance Company were established in this way. Irish Life Assurance company was set as a state rescue.  ICC and ACC to provide finance in particular sectors.

Non-commercial State-sponsored bodies provide activities and services in a wide range of areas.  They have been set up over time as new areas or competences are developed.

Establishment

State agencies are established in various ways.  Sometimes a statutory corporation is set up by legislation.  Its powers and functions are set out in the legislation. Bodies may be set up by legislation or statutory instrument. In other cases, a public or private company is formed.  The formation of the company is provided for in the legislation. In the health sector, there is provision for the establishment of corporate bodies by ministerial order.

Boards are generally part-time.  There may be a full-time Chief Executive.  The constitution of the Board is usually set out in the legislation.  There are usually 10 to 12 Board members. There is a government policy to promote a minimum percentage representation of women on State boards.

Typically, State-sponsored bodies have a board of directors which is accountable to the Government Department. Ministers generally appoint Boards of directors in their full discretion.  Sometimes external bodies nominate representatives from particular industries,  groups relevant to the activity concerned.

Legislation exists which provides for worker representation on certain State Boards. There is provision for an election for the employee representatives. On occasions, senior officials in government departments are appointed to Boards.  The civil servant would not normally report to the minister or the department.  His role is as an ordinary Board member.

Fees of the order €10,000 to €25,000 are payable in respect of the positions.  These are not payable to civil servants.  The Department of Finance has overall responsibility for deciding conditions of remuneration for board members.

Financing

Non-commercial bodies may be part or wholly financed by income from their activities.  They may be financed by borrowing from banks or from other institutions.  The Exchequer may provide loans, equity or subsidies.

In the case of statutory corporations, there is usually on a cap on the capital, which is determined by the legislation.  There are generally limits for loans and any increase requires further legislation.  The shareholder in statutory corporations is usually the Minister for Finance.

State-sponsored bodies are generally required to operate on a commercial basis.  However, in some instances, subventions may be permitted such as in the case of CIE.

In some cases, the government issues a loan.  The State may guarantee the lending.  The consent of the Minister for Finance will be required.  Commercial State-sponsored bodies may pay dividends to the State.  Dividend policy varies.

Non-commercial State agencies and bodies employ approximately 20,000 people.  They are generally providing expenditure and State agencies is approximately €7 billion.

All State bodies prepare accounts in some cases certified by the Controller and Auditor General or in other cases, especially commercial bodies, by private sector auditors.  Accounts are submitted to the relevant department.

Accounting for Functions

The Governmental Department responsible for the State agency will be set out in the relevant legislation.  Certain powers may not, be exercisable without the consent of the requisite minister. Reports and information may be required to be made to the Department.  Ministers may maintain contact with the chairpersons and may meet senior representatives from time to time.

State bodies generally present annual report and accounts to the Oireachtas. The minister does not answer questions in relation to commercial matters.  When the annual estimates are presented, the Dail can comment on the affairs of the bodies concerned in considering the relevant estimates.

The Controller and Auditor General carries out an audit of most non-commercial State-sponsored bodies.  This can also cover efficiency and the management effectiveness of the body.  These reports are considered by the Public Accounts Committee of the Oireachtas.