THE DEPARTMENT of Education will pay almost €1 million in rent on offices vacated by two defunct State-funded agencies.
Two agencies that dealt with international education ceased operations in December 2009 with staff and functions merged with other State bodies.
The mergers were part of the Government’s cost-saving strategy to rationalise State agencies.
The Advisory Council for English Language Schools (ACELS) and the International Education Board Ireland (IEBI) were just two years into a 10-year lease when they were wound up.
The lease on the offices at Sandford Lodge in Ranelagh, Dublin, with capacity for 12-15 people was €125,000 per year plus €2,500 annual management fee, according to the department in a memo released to The Irish Times under the Freedom of Information Act.
It was not possible to terminate the lease, according to legal advice received. The landlord would not surrender the lease without payment of approximately €1 million for the remaining term of the lease, the memo noted.
Legal advisers recommended against breaking the lease because the landlord would have a right to take action for the full amount agreed for the term of the lease.
Despite the advisory council body being a limited company, the department was considered liable for the lease.
A letter from the department in 2007 appeared “on face value” to be a form of guarantee to pay rent and could be used in a legal action, the State solicitor advised.
The department gave a letter to the landlord to say it would “ensure that continued funding is provided to ACELS and later Education Ireland” . The department had originally planned to establish a statutory agency, Education Ireland, at the Sandford Lodge premises, by amalgamating the two bodies. Rather than leaving the premises empty last year, the department looked for other State bodies to take on the lease.
The National Adult Literacy Agency with its 14 staff was interested in moving into the building, the memo from February 2010 noted.
The move almost quadrupled the agency’s rent from €35,000 to €125,000 per year. The rent was double that of comparable rents in the area, the memo noted.
There was also a three-year period of rental overlap to be covered for the literacy agency’s old premises totalling over €100,000.
Assigning the lease to the agency was “not optimal” but “the best available option” which would bring “minimal additional costs” and “some savings” a memo noted. The initial period of the agency’s tenancy was recommended to be set for five years until 2015. This possible “saving” was €157,000, representing the rent that would not be paid on the agency’s old property between 2013 and 2017.
