Taxpayers foot €15m cash transit bill

THE country’s taxpayers paid €15.1 million over four years for banks to carry out money transfers under the protection of the defence forces.

From 2001 to 2004 the average cost of the army escorting cash transfers was €6.86m.

The banks paid as little as 41% of that total cost with the rest having to be paid by the taxpayer.

For example there were 2,516 cash transfers carried out in 2002. The total cost of defence force protection for those transfers was €6.87m. That year the banks paid just €2.86m for the security arrangements.

That set figure of €2.86m was all the banks were liable for since the arrangement was put in place by the Department of Finance in 1995 no matter how much the State protection for cash transfers cost.

At that point it was only designed to ‘part cover’ the total costs to the State of providing the escorts, according to Defence Minister Willie O’Dea.

However, it was found that while in 1995, the €2.86m contribution by the banks covered 72% of the total cost, the relative level of contribution fell in real terms over the following years to just over 40%.

Then in May 2005 Mr O’Dea signed a formal agreement with the Irish Bankers’ Federation which said that, for a five-year period, the banks would pay the total actual costs incurred by the defence forces in the provision of cash escorts.

To allow time for budgeting arrangements to be put in place, the minister accepted a €1m deferral payment to be made at the end of 2005.

Revealing the figures for 2001-2005, the minister said the last payment received earlier this year was for the costs incurred in 2005 and totalled €6.03m.

“Pay accounts for 54% of the total costs of providing cash escorts. The non-pay costs include security duty allowance (7%), subsistence (8%), transport (28%) and aerial surveillance (3%),” he said.

“Costs in respect of each 12-month period to end-December, will be paid the following year on or before June 1. This is to allow for the compilation of returns from the brigades and allocation of costs following the year end.”

Mr O’Dea said the amount to be paid in 2007 for the escort of transfers in 2006 would not be available until early 2007.

Army escorts for banks moving large amounts of money started in 1978 following a large bank robbery on a security van in Co Limerick, but Mr O’Dea said the security threat had been reduced with the evolution of the peace process.