Department of Public Expenditure criticised proposed deal for new data watchdog HQ

The Department of Public Expenditure criticised a proposed deal for a new headquarters for the Data Protection Commissioner, saying the rent being sought was “exorbitant”.

The department said the planned €1.4 million-a-year deal did not represent value for money and that it seemed like it was the only suitable available premises that had actually been costed by the Office of Public Works (OPW).

In relation to the proposals 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 the department was wary of “sensitivity” in relation to the decision on this deal given the high-profile nature of the Data Protection Commissioner (DPC) internationally.

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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 DPC staff were at the time spread across three locations in Portarlington, Co Laois, and two separate offices in Dublin.

A business case for a combined headquarters had said it was important the DPC had its own offices, which were not shared with other Government agencies.

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 the DPC needed to be regarded internationally as a “credible organisation” and providing an appropriate office was key to this.

‘Reputational image’

The Department of Public Expenditure, however, 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 identified for the new HQ and said that the “own door, central Dublin location selection criteria” was not accepted by the department.

Its recommendation concluded by saying: “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 open the possibility for the deal to be reconsidered if “significant savings” could be achieved.

Relations between the department and the OPW became frayed after sanction for the deal was refused late last year, with officials in the OPW 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 reactivated

Negotiations for the property then ceased but were later reactivated in early 2021, 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 on year two based on prevailing market conditions.

The submission explained how of 38 properties initially identified, only five of them were ever costed – with four of those ruled out for unavailability or unsuitability.

However, it concluded by saying: “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.”

The sanction was subsequently issued to the DPC to proceed with the move in May.

The Department of Public Expenditure declined to comment on the matter.