Department of Public Expenditure queried “exorbitant” cost of plan for new headquarters for Data Protection Commission

The Department of Public Expenditure lambasted 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].

They 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 were wary of “sensitivity” around the decision given the high-profile nature of the Data Protection Commissioner (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 kick back 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.

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

The Department of Public Expenditure however said they had concerns about the use of “reputational image” as a factor in selecting a location.

They also flagged the estimated €4.3 million refurbishment costs involved at the Pembroke Row property and said that the “own door, central Dublin location selection criteria” was not accepted by them.

Their 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 the door open for the deal to be reconsidered if “significant savings” could be achieved in rental and refurbishment costs.

Relations between the department and the OPW became frayed after sanction for the deal was refused late last year with officials in the Office of Public Works 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 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.

It said: “We have reservations with regard to the initial consideration of this proposal and the limited criteria applied in terms of an own door and the Central Dublin location and the potential to acquire a suitable property outside of Central Dublin.”

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.

“This was not considered an extensive building search,” it said, “only one suitable building considered as part of the business case is not sufficient.”

Most of these records were only released following an internal review.