The public expenditure department lambasted a proposed deal for a new headquarters for the Data Protection Commission, saying the rent being sought was “exorbitant”.
The department said that the planned €1.4 million-a-year deal did not represent value for money and that it seemed to have been the only suitable available premises that had actually been costed by the Office of Public Works (OPW).
It also raised concerns over the impact of the pandemic, the implications of “hot-desking” or remote working by staff, and the decline of the commercial property market. Internal records also reveal that the department was wary of “sensitivity” around the decision given the high-profile nature of the DPC internationally.
An internal submission said: “There is a sensitivity attached to this proposal given the significant public, political and media interest and support attached to the DPC and a possibility of a public kickback from any negative, however valid, determination.”
The records explained how 150 staff of the data regulator were at the time spread across three locations in Portarlington, Co Laois, and two separate offices in Dublin.
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A business case for a combined headquarters had said it was important that the DPC had its own offices. It said: “Sharing a large office building with other tenants, some of whom could be regulated or be under investigation by the DPC could give rise to perceptions of insufficient independence.”
The business case said that the DPC needed to be regarded internationally as a “credible organisation” and providing an appropriate office was key to this. The public expenditure department said it had concerns about the use of “reputational image” as a factor in selecting a location.
It also flagged the estimated €4.3 million refurbishment costs involved at the Pembroke Row property and said that it did not accept the “own door, central Dublin location selection criteria”.
Their recommendation concluded: “I consider that a further building search should be carried out and that this should not be restricted to an own door, central Dublin, reputational damage criteria, and cognisant of value for money and attainable staffing levels.”
However, it left the door open for the deal to be reconsidered if “significant savings” could be achieved in rental and refurbishment costs.
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Relations between the department and OPW became frayed after sanction for the deal was refused late last year, with OPW officials said to be “clearly irritated”.
One internal email from January said: “They [OPW] advise that our decision has undermined their credibility in the market, that they cannot [and] will not renegotiate unless they can guarantee completion.”
Negotiations for the property then ceased but were later reactivated early this year with the department later sanctioning an improved deal despite continuing “reservations”.
An internal submission said there was now an “improved case” for sanctioning the project and that additional value for money “while not significant” had been achieved. Improved terms included an additional rent-free month and an “extraordinary rent review” that would take place in the second year based on prevailing market conditions.
The submission explained that of 38 properties initially identified, only five were costed — with four of those ruled out for unavailability or unsuitability.
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“This was not considered an extensive building search,” it said. “Only one suitable building considered as part of the business case is not sufficient.”
This had made a process for ranking, weighting, and selecting a property “obsolete” because other options simply were not available.
However, it concluded: “Based on the enhanced terms, the advices of the OPW, DPC and DoJ (Department of Justice), and the risk that the said proposed lease may be lost at this stage, it is recommended that consideration be given to granting the sanction sought by the OPW.”
TheDPC was sanctioned to proceed with the move in May.
Asked about the records, the public expenditure department said it had “no comment at this time”.
