COMMITTEE of PUBLIC ACCOUNTS debate -
Tuesday, 16 Jan 2001

Vol. 3 No. 2

Value for Money Examination, Driver Testing Service (Comptroller and Auditor General).

Mr. J. Farrelly (Secretary General, Department of the Environment and Local Government) called and examined.

Chairman

We are dealing with the 1999 Annual Report of the Comptroller and Auditor General and the Appropriation Accounts, Department of the Environment and Local Government, Vote 25. We are also taking a report of the Value for Money Examination, the Driver Testing Service, by the Comptroller and Auditor General and the National Roads Authority Annual Financial Statements, 1996, 1997, 1998 and 1999, resumed.

I ask Mr. John Buckley, who is deputising for the Comptroller and Auditor General to introduce the Vote for the Department of the Environment and Local Government. I have received apologies from the Comptroller and Auditor General who is on sick leave today.

Paragraph 24 of the Report of the Comptroller and Auditor General reads:

The Local Government Audit (LGA) service is responsible for the audit of the accounts of all Local Authorities. The LGA reports are submitted to the Department of the Environment and Local Government and to the Local Authorities and form part of the controls exercised by the Department in ensuring that procedures for the spending of public moneys are satisfactory. In 1999, Local Authorities received £577m from the Vote and an additional £593m from the Local Government Fund 17; Copies of the audit reports are made available to me in my capacity as auditor of the Department. All LGA Reports for the main Local Authorities for 1997 and 1998 with the exception of those for Wicklow County Council have been furnished to me.

In my previous Reports I have provided information relating to some of the matters on which the LGAs have critically commented in their reports on the audit of Local Authorities. I noted the following in my review of the 1998 reports:

In contrast to previous years, there were only a few instances where the LGAs had found evidence that excess expenditure had been approved by the Local Authorities after it had been occurred.

There was less criticism than in previous years regarding unsatisfactory collection yields on Local Authority service charges and housing rents and annuities.

The work of the internal auditors in Local Authorities is in some cases hindered by lack of resources or delayed appointments.

The situation with regard to deficits on Capital Account, referred to in earlier reports, continued into 1998 with many Local Authorities reporting specifically very large unfunded debit balances and other balances where it was unclear as to whether the deficits would be funded. Most capital projects are funded by the Department. The LGAs do not always indicate in their reports the precise breakdown between funded and unfunded balances, so the true extent of the unfunded amount is not always clear.

As is the case with other auditors of public bodies falling within the scope of the Prompt Payments Act, 1997, LGAs are required to report their opinion on whether Local Authorities have complied with the terms of the Act. Of the 38 prompt payments reports examined, 7 had been qualified by the LGAs while critical comments had been made in 7 others.

17 The fund is established under the Local Government Act, 1998. It is funded by motor vehicle duties collected by local authorities and by an annual grant from the Vote. Payments are made from the Fund in respect of expenses incurred or to be incurred by local authorities in performing their functions.

Mr. Buckley

We are dealing with paragraph 24 of the Report of the Comptroller and Auditor General. The background to this is that local authorities receive voted funds from central Government in respect of their activities. Motor tax revenues are also assigned to a local government fund which is available to finance the functions of local authorities. More than £1 billion from these sources was made available to the authorities in 1999 and a further £400 million was made available from the National Roads Authority. The accounts of local authorities are audited by the Local Government Audit Service.

This item in paragraph 24 of the Comptroller and Auditor General's report is, as in previous years, a summary of some general trends in the reporting for accounts audited during the year 1998. One item of note is the reference to internal audit in local authorities. It is noted in the paragraph that their work was being hindered by a lack of resources and delayed appointments. The Local Government Audit Service recently looked at the issue in one of its VFM reports which it published last month. That report, which surveyed the service in the authorities, came up with 28 detailed findings to address the weaknesses noted in its review of the services.

Chairman

Thank you. Before we proceed, I remind witnesses that section 10 of the Committee of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. These rights are exercisable normally with the consent of the committee.

I welcome Mr. Jimmy Farrelly, Secretary General of the Department of the Environment and Local Government. Will you introduce your accompanying officials?

Mr. Farrelly

I am accompanied by Niall Callan, assistant secretary, roads division; Ian Keating, finance officer, John Cullen, assistant secretary, local government division, and Tom Corcoran, assistant secretary, housing division.

Chairman

I welcome Mr. Michael Tobin, chief executive officer, National Roads Authority. Will you introduce your accompanying officers?

Mr. Tobin

I am accompanied by John Maher, the authority's accountant; Eugene O'Connor, head of project management and engineering; Michael Egan, head of corporate affairs, and Brian Cullinane who also works in that area.

Chairman

Also present from the Department of Finance are Mr. O'Neill and Mr. Howard. You are all welcome. Does the Secretary General wish to respond to Mr. Buckley?

Mr. Farrelly

There are a few specific points arising from the report. The first is that 75% of the Department's spending is of a capital nature. More than 40% of the entire public capital programme is accounted for in our Vote. This clearly shows that our Department is a capital spending one. The second point is that more than 90% of our spending flows through local authorities in grants and subsidies and a large portion of this flows through the National Roads Authority.

The Comptroller and Auditor General drew attention to the Local Government Audit Service. We have previously discussed this and you, Chairman, raised it with us in the past. We are trying to bring about substantial improvements in this area. The value for money unit of the Local Government Audit Service completed a report in recent weeks and this has been sent to local authorities. This report, together with guidelines to be prepared for local authorities on best practice in relation to internal audit, will be an important input to the development of future internal audit practices and standards in local authorities.

The report indicates that while most local authorities have some form of internal auditing in place, the depth and focus of these arrangements can be improved for bodies as large and complex as many of those in the local government sector. Copies of the report have been made available. As the practice of the committee is to keep it brief initially, we will deal with the issues as the Chairman wishes.

Chairman

I call Deputy Dennehy.

Deputy Dennehy

I am not prepared for questioning on this issue as I had expected that we would be dealing with the NRA outstanding item. Given the change in local government structures with the strategic management committees and greater involvement by public bodies, are schemes being put in place to monitor both value for money and the expenditure of funds in the future?

Mr. Farrelly

There is very little expenditure in the county development boards. There is a process of change in local government and we are finalising the change in management structures within local authorities. There will be three to five directors of services in each local authority with management responsibility for a particular service operating under the manager. This is the major change taking place and it is complemented by other changes which are being made in staffing immediately below them. A new financial management system is also in the process of being rolled out to local authorities. This will also bring about major improvements in financial control.

Deputy Dennehy

While it is the manager who will ultimately be called in it is the finance officer who handles the brief. Will the directors of services be accounting officers in their own right for the various aspects of the services?

Mr. Farrelly

They will not be accounting officers as such but there will be the potential for the manager to delegate responsibilities to them. This happens at present but in a much more rigid, developed management type system. The manager can delegate functions to directors of services as happens at present in the case of assistant managers but it will be done under a more integrated management system.

Deputy Dennehy

As you are aware, Chairman, we have discussed this matter before and you have been to the forefront having discovered a number of cases involving practices with which we were not in favour and which were outside the guidelines and in respect of which people were made answerable. On health expenditure, legislation has been introduced under which the chief executive officers of the eight health boards are responsible for ensuring there is no overspend. I do not know the exact terminology used but it is a personal responsibility. Is that likely to happen in the area of local government?

Mr. Farrelly

In the area of local government, while each local authority is independent, management controls are operated through the manager but this is subject to the local government audit system which is in a similar position to the Comptroller and Auditor General in relation to Departments in the Civil Service. The Local Government Bill, as published, provides for the setting up of audit committees and new procedures. While it would be premature to anticipate what the final outcome of that legislation will be once it has passed through both Houses it contains an important provision on the setting up of new audit committees.

Deputy Dennehy

It is the area of accountability in which I am interested. I am not saying that there was anything wrong but it was found necessary in the health area to introduce legislation dealing with accountability under which huge personal responsibility is placed on the chief executive officer of each health board to warn the health board etc. Considering that all and sundry will be brought in as partners - all sorts of groupings in the public arena - is there any danger of a slippage in responsibility and a move in the other direction as happened in the health area where everything within the remit of the health board, including staff, is more easily controlled?

Mr. Farrelly

I would not think so. The manager will continue to have accounting responsibility. Under the law, as it stands, expenditure has to be approved by the elected members. If there is a deviation from what was initially approved in the Estimates one has to go back and obtain the consent of the elected members. The committee has discussed with us in the past the fact that consent was being obtained after rather than, as required, before the event. In his report the Comptroller and Auditor General draws attention to the fact that there has been a significant improvement in this respect and that this is no longer happening on the same scale. I recognise that the efforts of the committee in this regard have been a factor in enabling us to tighten up very considerably.

On the health authorities, I think the problem was that there was a tendency to incur excess expenditure, expenditure over and above budget. We have not encountered the same problem in the local government sector. There has been expenditure on subdivisions without exceeding the overall budget. The situation therefore is not comparable. Various people brought in from outside the local government system will not be in a situation where they will take financial decisions which will, radically, result in a lack of financial control.

Deputy Dennehy

It is good to read that there have been improvements which I agree probably result from the work of the Comptroller and Auditor General and the committee in highlighting various issues. The system was very loose. I am just afraid that with the massive changes that are about to be made you might move backwards again but at least you are conscious of this possibility. I compliment all involved on the improvements.

Deputy Durkan

At the end of the year unspent moneys were surrendered. They run to a fairly considerable figure. On the face of it, it only looks as if the figure is £5 million plus but on closer examination it looks as if a considerably larger figure was surrendered which was offset by expenditure in other less essential areas. I wonder about the impact that this is likely to have. The explanations are given on page 158. Under subhead F.3 claims from local authorities were less than anticipated. The programme recoups local authorities certain borrowings not written off in the context of the local loans fund. The shortfall under subhead F.5 was due to slower than anticipated progress by local authorities. Under subhead B.2 claims for certain housing grants were less than anticipated. Under subhead D.2 progress on waste management was slower than anticipated. The shortfall under subhead F.2 was due to slower than anticipated progress on a number of library projects at construction stage. There is also a reference to the housing area which is generally along the same lines.

Given the need for greater expedition in the delivery of services it is a sad reflection that sums remained unspent in these areas. The final sum surrendered may seem modest but on closer examination we find that the sum surrendered was offset by spending in other less essential areas where delivery of services to the public is not as sensitive.

Mr. Farrelly

On the sum surrendered, £5 million, to a large extent it relates to EU co-financed projects which did not materialise. It is not the practice to seek sanction for the transfer of such moneys to other purposes on the basis that they will arise for payment in the following or subsequent years.

Naturally within the Vote there will always be transfers as between subheads in cases where for various reasons money cannot be spent on a particular service. It is a case of swings and roundabouts. One does not stick rigidly to the subdivisions and money is diverted for other purposes. For example, under subhead B.2 claims for certain housing grants were less than anticipated. It is an open-ended scheme. I know we are looking at the 1999 Vote here, but to some extent under our Vote we transferred money to finance significant additional expenditure on, say, national roads. In regard to many of these programmes today the constraint is no longer money. On the basis that bodies under our control can do that little bit more, to the extent that we are in a position to divert money to fund it, we will do that. Housing is a classic example of this. We have made it clear to any local authority that is in a position to build additional local authority houses that the money is in our pockets and we will give it to them. It is a question of what is possible in some of these areas.

Deputy Durkan

I hate to be negative all the time because it is not in my nature. However, that there is surplus money in housing at present raises very serious questions. The reverse should be the case. We should have overspent by £5.5 million if we were doing our job properly in that area at a time when there are more people on housing lists in various local authorities than ever before in the history of the State and when those lists are growing at an alarming rate. It is all very fine to say that the local authorities have instructions to proceed. Good value for money and a good delivery of service to the public would be better reflected in a much more serious and dramatic impact on the whole housing area. The Secretary General said the shortfall was due to slower than anticipated progress by local authorities. Progress was obviously insufficient to meet demands anyway, but slower than anticipated progress is surely the worst of all possible situations. I could go on about that because it is very serious. It is a question on the mind of every public representative in the country. It is in the mind and heart of every person who does not have a house and who is looking for one at this time, and they are not all on local authority housing lists. Why were the local authorities slower than anticipated? What was the anticipated rate of progress?

Mr. Farrelly

A major feature of under spending in recent years on the housing front has been the Ballymun project which was projected to take up a huge amount of money. It was slow in taking off owing to various problems, including the need for environmental impact statements, legal challenges and so on. All of this gave rise to under spending over the past two years.

I would not like to give the impression, however, that there has been an easing off or an under achievement on the housing front. In the housing area overall in the past year, while we do not have the final figures, output will be up significantly from about 46,000 to about 50,000 houses. Looking at the housing picture in its totality, there has been significant achievements. This has been recognised in the report of the Irish Home Builders Association in recent weeks and by various other bodies. There will always be features such as I have mentioned. The Ballymun regeneration project has been a significant feature of under spending on housing. However, it is the intention to divert that money and spend it elsewhere.

Deputy Durkan

Housing is surely a primary issue at this moment.

Mr. Farrelly

Absolutely.

Chairman

The two issues before us today, housing and traffic, could be the undoing of the Government in the election. That may suit people in the Opposition parties, like myself. However, there is lack of performance on a grand scale here. I have just come from Dublin Corporation where I spent the whole morning with homeless people. A young woman with cancer must walk the streets all day in this freezing cold weather, because people who are put up in a bed and breakfast accommodation must leave at 8.00 a.m. That is one of several cases I dealt with this morning. Meanwhile we have under spent on the housing budget. It is calamitous, and there is a total lack of a sense of urgency in the local authorities. In Dublin, for instance, there is a schedule of lands which Dublin Corporation has, owned by statutory authorities, lying fallow for years, some of it in my constituency. Five or six years ago, they were to be sold for housing. They have still not been sold for housing. Four years ago they were to be sold for housing. Last year they were to be sold for housing. They still not been sold. CIE has 30 acres at Broadstone. The Eastern Health Board has 70 acres at Grangegorman. CIE has another 12 acres at Cabra. I was told by letter five years ago they would be zoned for housing, four years ago, three years ago, two years ago, and six months ago, and there are people walking the streets in dire straits, ill people put up in bed and breakfast accommodation at night and walking the streets freezing cold during the day, and others sleeping on the streets. Meanwhile the millions of pounds provided by the Oireachtas is not being spent. We want better performance and we want to know what will be done about it? This is an administrative inefficiency. The Government has provided the money, and the officials are not providing the goods. There is an enormous inertia of which the Department and every local authority should be ashamed.

Mr. Farrelly

To repeat what I have said already, if we discount the figures for Ballymun, in the context of the main housing programme there was overspending of £6 million in 1999 and additional spending of £18.5 million in 2000. What we are talking about here is totally accounted for by the slowness, due to legal challenges, in the taking off of the regeneration of Ballymun. It is up and running at a very strong pace now. However, it got tied up in legal challenges in the courts and that slowed the project down. If one discounts the Ballymun situation, £6 million was spent in addition to the initial provision in 1999 and an additional £18.5 million in 2000.

I take the Chairman's point in relation to the overall housing programme. We have had it analysed. We accept that to a considerable extent there is an insufficiency of supply relative to demand. I gave the figures and related them to overall housing completions and output at the end of last year which are up substantially. The Department will continue to expand output in every way possible. Major efforts are being made to expand the voluntary housing sector and there has been considerable success in that area. In terms of whether what is being achieved is enough, of course it is not enough. It is a question of continuing to develop programmes to the maximum extent possible and that is what the Department is doing on all fronts.

On the local authority housing front we have moved to multi-annual programmes so that local authorities will know with certainty what their provision is for the coming years. I would reject the suggestion that we are negligent or deficient or that we are not responding to demand. As far as the Department is concerned, housing is an absolute priority and is being treated as such to the extent that we have put in place a cross-Department housing unit to pull the strands together in terms of water and sewerage, planning and so on. Housing is being prioritised in every way possible, and I must reject the suggestion that we are not spending. I have explained the basis for the fall down in spending, which is the Ballymun scheme. People must accept and recognise that if there are challenges in the courts we just cannot proceed. However, to the extent that we can, we divert the money into other housing areas.

Deputy Durkan

The Ballymun scheme does not affect other local authority areas. It affects one particular area of one local authority. It may be that I am becoming a crank in my old age but I consider it necessary to bring these matters to the attention of the Chairman because there is a serious problem and it is not being touched. You mentioned it when you referred to the voluntary housing agencies. The voluntary housing agencies are the cop out whereby the Department no longer has to shoulder the full share of its responsibility. I would go further, Chairman. It is soul destroying to have to meet the people who are coming rapidly up the income scale. For example, the £20,000 plus families are on the local authority housing list because they cannot get a house by any means anywhere. I have been told by active public representatives in this city that there was no possibility of building any houses in the city because there was no land available. Yet when I walk around the city I find countless waste sites all over the place. At a previous meeting of this body, you and I asked that an audit be done to find out what is going wrong, and why the whole thing is logjammed.

I was a member of a local authority which, in the bad old days when we had no money, was able to build over 300 to 360 houses. That was an amazing performance at that time. When the Celtic tiger is running wild all over the country we are lucky if we get 250 houses. There is something very wrong. If the Department of the Environment and Local Government has decided to opt out, by all means opt out but tell everybody so that we are not wasting our time. The saddest case I had to deal with recently was of a young mother with a baby, who for one reason outside of her control, had to live in the open air under plastic sacks for six weeks in this country at this time given the nature of the economy. Somebody somewhere should have to answer for that kind of problem. It is not an isolated one. There are several more like it. It is about time we copped on to it and did something about it.

Chairman

May I ask a few questions on this issue? How many people are sleeping on the streets tonight? How many people slept on the streets last night in the freezing cold?

Mr. Farrelly

There are about 300 persons sleeping on the streets of Dublin as of now. I have had discussions with the manager of Dublin Corporation immediately before Christmas on this matter. Various initiatives are being taken. Dublin Corporation has a van which goes around to collect people off the streets. There are problems in that not everybody wants to be picked up and taken to accommodation. We are not insensitive to this problem. There is an increasing need to provide funds for hostels and accommodation. It is part of a wider problem. Not everybody wants to be collected and taken to accommodation.

Chairman

I will tell you why. Even when there is accommodation, the accommodation they are expected to share is not safe or they may have to share with people who have drug addiction problems. I met a young woman with cancer in the corporation this morning, a battered wife, who has lived in several bed and breakfasts and refuges for the past eight or nine months. She is now in a bed and breakfast but was taken to hospital ten days ago, three days after I spoke to her in the corporation. While in hospital her bed and breakfast place was given to a family. She is now in hospital sharing a room with four drug addicts. She has secondary cancer and the corporation has nothing to give her. A 43 year old man who lost his job through ill health has no hope. He gets out of his hostel at 7.30 a.m. and walks the streets in the freezing cold until 6 p.m. Just before Christmas I had four such cases. I met some business people that night in connection with another problem whom I told about the other side of the Celtic tiger. I had them in tears by telling them true stories. Your Department is presiding over this.

Mr. Farrelly

Perhaps I can go into this in a little more depth. So far as the people who are sleeping on the streets are concerned a special provision of £5 million has been made available to Dublin Corporation for the provision of two high support hostels for homeless, drug and alcohol users, in other words, a wet-type hostel. People who may not be amenable to other types of accommodation can be picked up and provided for. I said earlier that the corporation van tours around and collects people who are available to be collected. From the point of view of the broad homeless strategy, in May of last year a specific programme was launched for homeless persons. For the first time in the history of the State it provides for a co-ordinated approach right across the system and an integrated response to homelessness from all agencies. Local authorities and health boards are brought together to draw up action plans to provide a coherent response to homelessness. A homeless forum has been set up in each county under the auspices of the housing SPCs. Local authorities are responsible for the provision of emergency accommodation; health boards are responsible for the provision of care. Therefore the two are married - local authorities are responsible for the accommodation and the health boards are responsible for providing the necessary back-up care which is essential for dealing with these people. I take the point mentioned that different types of accommodation are necessary to meet the different needs and requirements. I referred to the wet hostel type idea which, in present circumstances, is necessary to deal with the homeless problem.

Chairman

Wet hostels?

Mr. Farrelly

It is intended for people with drug and alcohol problems. It is a different form of accommodation. These people can be picked up, taken to this accommodation where they will be given shelter, protection, care and will be looked after.

Chairman

What is the time scale for providing this accommodation?

Mr. Farrelly

As of now the corporation is out there seeking to buy premises for accommodation in Dublin. A hostel in the Drumcondra area will come on stream shortly, through Respond, but will be financed through our system. It would provide limited accommodation, probably 60 units.

Chairman

Secretary General, I have to say that this sounds even more ridiculous. I will tell you the real history. Dublin Corporation and the Eastern Regional Health Authority have a site on Ormond Quay beside Ormond Square which is in the heart of my constituency. It has been lying fallow for about four years and is beside Charles Street Clinic. That was to be the site three years ago. Then it was to go to a corporation building on Wellington Quay which was to be detenanted by the corporation. That was changed. It then changed to Parkgate Street. That Parkgate Street hostel for the homeless is still being prepared after many years while people are walking the streets and sleeping on the streets. There is an absolute lack of urgency by officialdom to the extent that everyone involved should be ashamed of themselves. Indeed, those of us public representatives who tolerate it should be ashamed of ourselves. We have to start showing anger and impatience at this inertia. It goes back to what I said about the sites. There are hundreds of acres of land in statutory possession in Dublin. Dublin Corporation has a complete schedule of those sites but it cannot get its hands on them. Those lands have also been lying fallow for a long time. The committee was told by the Department of Defence that Clancy Barracks was being sold three or four years ago. It still has not been sold. Five years ago the committee was told the lands at Grangegorman would be transferred. There are 100 acres, between Grangegorman and Broadstone, at the top of Dominic Street, in the centre of this city, still lying fallow. There are 12 acres on Quarry Road. There is a long list of sites. For the past five or six years we have heard the same thing, "We have more money, we are going after it". I bet my bottom dollar, if this committee does not do something about it we will hear the same next year and the year after. It is not acceptable any longer. Has any other member of the committee anything to say? I call Deputy McCormack.

Deputy McCormack

As in Deputy Durkan's and other Deputies' local authorities, we have the same problem. We have three systems of repairs to houses: repairs in lieu, where somebody will repair his own house instead of waiting for a local authority house; essential repairs; and repairs for the elderly. A person classed as priority one may get the repairs done in about two to three years. If not, they will not ever get them done because priority two does not necessitate the repairs being carried out at all.

Like the case mentioned previously, I know a person who applied in May 1999 for an essential repairs grant. He is a bachelor living on the edge of the city who has 16 acres of land, a small farmer. His family has lived there for generations. He has no bathroom and bad windows and doors and is classed as priority two. He came into my office a few weeks ago and said he would not wait for the grant any longer, that he would sell a site and repair the house himself. He could not get planning permission for a site, however, because he was located in a high amenity area. That man is destined to remain in that house because there is no money available to Galway County Council, in this case, or Galway Corporation for priority two repairs for the elderly. Why is the £6.5 million not spent? Why can it not be made available to other local authorities with waiting lists for those type of repairs?

Mr. Farrelly

I hear with concern what the members of the committee and the chairman are saying. In so far as we are concerned, we are making every effort humanly possible to deal with the housing problem in the broadest sense. For my part, I have spoken to managers on the housing front, whether in relation to local authority housing, servicing land, making land available or the clearance of planning cases for early implementation and in so far as the Department is concerned, we are doing everything humanly possible. Money is not a problem. Planning permission, by and large, is not a problem. Serviced land is not a problem. We have taken action on all of these fronts but within the terms of the overall industry, delivering is a problem.

On the local authority housing front there is a difficulty. Members of the committee, who are members of local authorities, will be aware that when we go to public tender for construction of social housing schemes, there is a difficulty in getting tenders. There is work available on a scale where the building industry, by and large, prefers to operate within the private sector but in so far as the central system is concerned, money is not a problem and serviced land is not a problem. Planning permission is not a problem, and everything humanly possible is being done to increase the rate of provision across the system.

We fully recognise that the supply of housing across the system is critical and in fairness, the measures that have been taken are beginning to pay dividends. We have seen an easing in the housing market but that is not to say we can be complacent. We have not achieved enough. We have to continue to do more. Progress is being made but it is slow. I take the point in relation to the homeless and so on. Major initiatives have been taken for the homeless and I will not repeat what I have said already.

Chairman

Deputy McCormack asked a question on repairs. Basic repairs to houses cannot be done yet there is money lying in other subheads that could be diverted to that purpose. Has consideration been given to the point raised by Deputy McCormack?

Mr. Farrelly

This is probably a problem at local authority level in terms of getting work done. Money has been provided on an increasing scale for the area. If local authorities have problems in this area, they should come back to us because we are in touch with them constantly on it. We have increased the allocation from £2.7 million to £3.4 million for this specific area; I am talking about 1999.

Deputy McCormack

Perhaps Mr. Farrelly would get in touch with Galway County Council. I have been talking to it for the past six months. The staff officer dealing with the repairs in lieu section has left, they were unable to appoint another staff officer and the whole issue was dropped in the meantime. Nobody was being assessed for repairs in lieu. People who had been assessed and put on priority one were not getting the repairs done. Will Mr. Farrelly check out the situation to see how grave it is in County Galway and in Galway city also?

Chairman

We now request a report on the Galway situation within one month, and suggestions as to what can be done about it.

Mr. Farrelly

There will not be a problem with that. We can come back to the committee on that but from what the member has said it appears there may be an operational problem within Galway County Council. We will take that on board and look into it.

Chairman

If that is the case, come back and tell us.

Deputy McCormack

I want to ask a question on Vote 25 but it is not related to housing.

Chairman

We will deal with the housing issue first.

Deputy McCormack

Can I come back then on the other matter?

Chairman

Yes, certainly.

Mr. Gildea

Housing in Donegal is in a similar position. The number of houses provided by the local authority is falling far short of the amount of funding provided for housing. Housing is terribly scarce in Donegal also. People are crying out for houses yet the houses are not being built even though the funding may be available. Mr. Farrelly mentioned the establishment of a cross-departmental housing unit. Does the Department have any input or any way of pressurising local authorities to get their act together?

Mr. Farrelly

Yes. I met managers as a body and in individual groupings. I am sure I spoke to them on four occasions in the past five to six months about this topic. In so far as Donegal is concerned, and the Deputy may be more familiar with the local scene than I am, an initiative has been taken there which is being repeated in other counties in that the private sector is being asked to tender to provide the houses and make them available to the council. That is a welcome initiative and it may give a basis for success in that it is a different way of doing things. The problem to some extent is that when local authorities put out to tender, say, a social housing scheme, they are not getting the responses. This is a new approach not just in Donegal but Donegal may have been one of the first counties to pilot this scheme and it has been reasonably successful.

I take the point the Deputy makes. We will continue to harass the local authorities in terms of the necessity to deliver on this front. Initiatives are called for and the type of situation which Galway and other counties are developing is necessary to some extent. I spoke to managers in the latter quarter of last year and told them that if they cannot build the houses, they should buy them on the market and make them available to meet housing needs. To some extent they have done that in that about 600 houses have been provided in this way. It is not a total answer because it is not increasing overall housing stock. I may as well make my apologies that we would like to see it done differently but if it cannot be done one way let us do it in whatever way it is possible to do it.

Deputy Gildea

Another major difficulty in County Donegal is the essential repairs grant. Many living in bad conditions could have their homes repaired to a better standard if they could avail of this grant. Unfortunately the Department seems to have a proviso in the eligibility criteria which states that in order for an applicant to be eligible the house or dwelling must be in such poor condition that it must not be economically repairable but be in such condition that it can only be repaired to an extent that makes it habitable for the next ten years. This is a major difficulty.

Mr. Farrelly

It is an essential repairs grant, not an open-ended house improvement grant as existed in the past. To this extent it is for essential repairs. I find it hard to talk about specifics. I would expect it to be operated with some flexibility but at the same time it must meet a short to medium-term need in terms of essential repairs. In other words, it would be wrong to give the impression that in some way we are talking about developing this into a normal house improvement grant as we had in the past. At the same time there is flexibility to use it within the context of it being an essential repairs grant.

Deputy Gildea

I would not under any circumstances advocate that it be changed to a standard house improvement grant. However those living in reasonably bad conditions cannot afford to pay for the repairs themselves. We are told by local authority officials that this proviso by the Department prevents many needy applicants who need repairs to their homes to make them reasonably comfortable availing of it. We are told it is this proviso that is causing the problem.

Mr. Farrelly

Chairman, I am coming back to the committee with regard to the Galway situation and would be prepared, with your permission, to extend this to take on board the essential repairs grant generally.

Chairman

I suggest, given my concern about housing, that we recall you on 8 March to discuss housing and related matters. There is an acute problem in Dublin because the local authority loans which are adequate outside Dublin are not adequate in Dublin given prevailing prices. When I say Dublin I am referring to the greater Dublin area. The £110,000 50-50 loan maximum will not buy anything in Dublin. Couples and individuals waiting to buy houses are being pushed onto the housing waiting list. They are often paying rents that are higher than what they would pay for a mortgage but they cannot get a higher mortgage. These are major problems which are adding to the housing lists. Again, there is a lack of urgency in providing affordable housing in Dublin. There are two sites at last coming up for planningpermission. If we are lucky they will be built by the middle of next year. They should have been built three years ago. Few other sites are coming up.

The other matter that ought to be emphasised more is that there are many senior citizens in the city and country living in large houses which are more than they need. They are often in need of repair but they cannot afford to repair them. Dublin Corporation - I am sure this is true of other local authorities - has with enormous success built bungalows for senior citizens. I am aware of one such case in East Wall where there are nine bungalows being built. In response to my own circular I received about 80 responses expressing an interest in them. The people concerned are living in houses that are too big and probably too cold and insecure for them.

Given the extra need for secure accommodation for senior citizens the unit cost is cheaper than building new big houses. It would also yield new houses in the market. There is also less social resistance to senior citizens' dwellings. I do not know the reason this is not given greater priority and would like the question to be addressed. I envisage great scope for the buy back system where people sell their house and retain three quarters of the yield, with one quarter going to the local authority, and receive a senior citizen's dwelling. This should be done more often.

There is also the question of local authority housing. At the Maryfield convent there is a nursing home and bungalows and people share the common facilities of washing, security, medical and food. These are matters at which we should look. They would contribute to easing the housing problem or at least increase the number of houses for sale.

There are two categories of homeless: those sleeping on the streets and those who are living in bed and breakfast establishments and hostels and who are obliged to walk the streets all day with nowhere to eat, clean, rest or keep warm. For these people 8 March is a long time away but it is a reasonable time to give the Secretary General to come back to the committee. We should also call in some local authorities to hear their story and who they blame for the problem. Will the committee agree to this and leave it to me to decide? Agreed.

Deputy Rabbitte

I have two brief questions. Am I to understand, Mr. Farrelly, that the affordable housing scheme can be subverted by builders saying they have too much work in hand in the normal private sector and not seriously tendering for these projects?

Mr. Farrelly

No, I am talking about the local authority housing scheme. If there is an invitation to tender for a local authority housing scheme the interest is not coming forward from builders on the same scale to bid for it. This, to an extent, is explainable by the tiger economy and situation where there are plenty of more attractive schemes, whether houses or offices, for which to tender.

Deputy Rabbitte

I thought you made the remark with particular reference to affordable housing.

Mr. Farrelly

No, I was not referring to that. I am sorry if I gave that impression.

Deputy Rabbitte

Does that mean the affordable housing element is going extremely well?

Mr. Farrelly

The affordable housing scheme is making a significant contribution. We would always like to see all these go better, if I can put it that way.

Deputy Rabbitte

In my case, there is not a single affordable housing scheme up and running yet.

Chairman

In Dublin city or county there is not one affordable housing scheme. I know there was a bad reaction to the proposal that flotels be brought in for immigrants but if we brought in some of them temporarily for the homeless or those waiting for affordable houses I would be delighted.

Deputy Rabbitte

There is a single scheme approved in my county but nothing has happened yet. I am not trying to walk you into giving an answer to a question which you do not want to give but there has to be an explanation. There is not much point in us rhyming off the things we are doing for affordable housing when nothing is happening.

Mr. Farrelly

The affordable housing scheme is very slow to take off. Arising from this in June last year substantial improvements were made to the eligibility terms of the scheme. In particular, the income eligibility limits were raised to £25,000 for a single income household and £62,500 for a dual income household.

Deputy Rabbitte

With no disrespect, Mr. Farrelly, we all must have our minds refreshed from time to time but the fact that you have to have your mind refreshed on this by looking at the figures in front of you would not imply that, as Secretary General dealing with the most urgent problem facing the Department, you are familiar with the fact that the affordable housing scheme has so far failed to get off the ground. Is that not the truth?

Mr. Farrelly

It has not got off the ground arising from which changes were made to the scheme in June last year. More importantly, the mortgage subsidy rates were also improved and now allow for households with a gross income of £20,000 or less in the preceding tax year to qualify for a subsidy towards their mortgage repayments.

Chairman

Will Mr. Farrelly give the committee details of those changes?

Mr. Farrelly

Yes. A subsidy of up to £30,000 in major urban areas and £25,000 in other areas is now available to local authorities to enable them provide houses at an affordable price.

Chairman

Is there a leaflet on this, of which the committee could get a copy?

Mr. Farrelly

I can get the committee particulars of it in the short-term. I do not have them with me.

Chairman

Fine.

Mr. Farrelly

The affordable housingscheme had not got off the ground and this is an effort to bring it up front. The subsidy is quite substantial.

Deputy Rabbitte

Has there been any pick up since June?

Mr. Farrelly

A slow pick up.

Deputy Rabbitte

Returning to my original question, are the builders subverting the scheme because they have so much other work to do?

Mr. Farrelly

No, not the builders in the case of the affordable housing scheme. I was clear in answering the Deputy's question. It is not the builders.

Deputy Rabbitte

In that case, what is wrong with it? On the face of it, it appears to be a good scheme. What is the problem?

Mr. Farrelly

Taking account of the subsidy we introduced of up to £30,000 in the major urban areas and £25,000 elsewhere, we hope by increasing the limits it will bring them to attractive levels.

Deputy McCormack

Is it a subsidy of £30,000 towards the purchase cost of the acre?

Mr. Farrelly

Yes, to the local authority for the site.

Deputy McCormack

If an acre costs £300,000 or £400,000 a subsidy of £30,000 will not do much to reduce the cost of affordable housing.

Mr. Farrelly

It relates to the site.

Deputy McCormack

A sum of £30,000 in a total of £300,000 or £400,000 will not do much to reduce costs.

Mr. Farrelly

We hope we are not talking about affordable houses at that level.

Deputy McCormack

It involves land at that cost.

Deputy Durkan

Many of the sites available to local authorities for building purposes were bought ten or 15 years ago. At that time £30,000 would buy the whole acre. In common with my colleagues I cannot understand what is happening in the sector.

Chairman

It is clear something is seriously amiss and I am glad we have had this discussion. I am confronted on an hourly basis with the reverse of the Celtic tiger in terms of those living in awful conditions. I am also confronted by people who want to buy accommodation under the affordable housing scheme. I have made representations on behalf of people and brought some of them to the corporation. However there is not one affordable housing scheme up and running in the Dublin area. It is not that people are not seeking it, there are no houses available. That is the reality. The particular problem of house costs in Dublin has not been addressed in any way.

This matter will be dealt with on 8 March. The committee will write to the Secretary General and raise points that we want addressed on that day. The committee will also invite people from local areas and others involved in housing to try to get a clearer picture of the reason when money is available results are not being achieved. We are not getting the outcome the Oireachtas provided for in the Vote.

Deputy Rabbitte

We should leave the matter until then, Chairman.

Chairman

Yes, we will move on from housing.

Deputy McCormack

Another underspend was £3.5 million regarding progress on the waste management project. The Minister announced in August 1998 that various regions throughout the country would have to group together and produce waste management plans. What has the Minister or the Department of the Environment and Local Government done since to advance progress on waste management? Have many recycling ventures been grant-aided? Have any tax incentives been given to those involved in recycling paper, cardboard, bottles, etc? What has been done? Why is there such a large underspend given that waste management is a major problem for all local authorities? What has the Department done to advance the reduction, recycling and reuse of the waste being produced? Why was there an underspend of £3.5 million?

Mr. Farrelly

Regarding the £3.5 million underspend, that money was not spent in 1999. It was money required to be spent under the operational programme and carried forward. I do not know if it gives any joy but it was spent in 2000. The explanation to an extent is that the payment of several grant claims was delayed as insufficient documentation was submitted. This is a critical point in terms of payment of moneys under EU operational programmes. Grant payments are withheld in cases where the EPA licences have been applied for but not yet obtained by the grantees. This is another delay factor. It is a necessary delay factor in that there are no circumstances in which we should pay money where there is a requirement to have an EPA licence and it is not available.

Deputy McCormack

If there was an underspend of £3.48 million what was spent in 1999 on the promotion of waste management projects?

Mr. Farrelly

The situation for 2000 was that a figure of approximately £8 million was provided under a new programme which came into place but had not been approved. Therefore that is a carry forward equally. Of the £8 million, £3 million was spent and £5 million was not spent. It is a factor. There was a delay in the implementation and approval of EU programmes.

Deputy McCormack

In 2000 a total of £3 million was spent and £5 million was unspent.

Mr. Farrelly

Yes, that is right.

Deputy McCormack

Why is progress not being made? What pressure is coming from the Department of the Environment and Local Government to establish schemes? In what way are public or private enterprises which want to get involved in recycling, reuse and separation projects being grant-aided? What is being done?

Mr. Farrelly

There is a major emphasis in that we are addressing chiefly local authorities with a requirement that measures should be taken into account in waste management planning strategies and plans being prepared at local authority level. This is something with which all of us would be familiar. An ongoing debate is taking place at individual local authority level where regional waste plans in particular are in the process of going through. There is a requirement on us at EU level to meet certain waste recycling targets, etc.

Deputy McCormack

That is right.

Mr. Farrelly

At this stage the obligation is on local authorities to adopt the appropriate plans to provide for this. I would not like to comment in terms of where we go from here. If the appropriate plans are not adopted to meet what is, in effect, EU and statutory requirements on the Department——

Deputy McCormack

The EU requirement appears to be, in the waste management plans being produced, a 47% or up to 50% reduction in waste. There is an ongoing campaign in Dublin since service charges were introduced. However there is no point adopting waste management plans if the physical facilities in local authority areas or the regions to cater for the 47% or 58% reduction in waste are not available and if composting plants, plastic or cardboard and paper recycling facilities are not ready. What grant assistance is being provided for people to get involved in real recycling rather than pretend recycling that took place in some local authorities where people separated waste for recycling but it ultimately went to landfill? That was not recycling, it only passed the buck. There is no real means to meet the demand for a 47% to 50% reduction in waste disposal. What should be done with it and what is the Department doing to ensure facilities are in place to cater for it?

Mr. Farrelly

A few issues are involved here. In the first instance we must reach the stage where one can get the appropriate waste management plans adopted. They will provide for a combination of measures, whether it be through landfill or modern technology means of disposal with of course a major effort at waste separation and recycling and all those things. Of course, if we are talking in terms of funding waste disposal, this is something which is not capable of being funded from the centre because under the polluter pays principle we are debarred from funding such activities by the EU. For waste recycling there are grants which can be provided and made available and drawn down.

Deputy McCormack

We are in a situation where people have never been more ready to involve themselves or more educated. They may not want incineration or whatever but they have never been more ready to involve themselves in waste separation, recycling, reduction and composting, yet in most local authorities, including my own, there is no place to harness the goodwill of the householder who wishes to do this. In Galway city where there are approximately 25,000 houses we have only been able to introduce a pilot scheme in 600 houses in my own area of Oranmore. It has reduced the waste being disposed of by well over 50%. However this is all the local authority can cater for because of the lack of composting facilities. Private enterprise has not been encouraged or grant-aided to provide facilities to deal with the major waste problem in the country. What can the Department do about this? Reference was made to unspent funding of £5 million for 1990 and £3.4 million for 1999. What can be done to grant-aid private enterprise or private-public enterprise to get seriously involved in recycling and separation?

Mr. Farrelly

What we are looking for in the whole waste area is an integrated approach. There is no point in mincing words about it. This is proving difficult to achieve across the country. There is no point in getting into specifics but there has been a difficulty at local authority level in getting approval for the integrated waste management plans where the approach was to have this done on a regional basis. It is a matter for the local authorities to adopt these plans. One cannot deal with waste on an isolated basis. There is need for a package of measures to deal with the totality of it.

Clearly we are into major problems in this area because we are up against the wire now in so far as the EU is concerned. It is threatening to take legal action against us to ensure we fulfil our obligation to deliver on these measures. However there is a difficulty in ensuring the appropriate plans are in place to proceed. If this continues a different approach will be required. We are coming close to this.

Deputy McCormack

With all the goodwill in the world every local authority or region might adopt a waste management plan but if there are no facilities to deal with them it becomes a waste of time. No encouragement is provided for anybody to adopt such plans if the waste is to be disposed of by landfill or incineration in the absence of reductions. You referred to the polluter pays principle but who will finance the local authorities to enable them adopt these kinds of programmes? A charge of £95 per house in Dublin, Galway or anywhere else will not be sufficient.

Mr. Farrelly

I agree that a higher waste charge is required. There is a proposal to introduce a landfill levy on waste as it enters the disposal point. What is required is the integration of facilities, whether it be landfill, recycling or whatever, with a substantial landfill charge. Some authorities could be doing more in that they are taking in substantial money at entry point to landfills. This money should be put back into the appropriate package of measures to deal with the issue in an integrated manner.

Deputy McCormack

I do not want £3.4 million and £5 million unspent when there is so much that can be done to reduce the amount of waste of which we are disposing.

Mr. Farrelly

I am not disagreeing with the Deputy. What I am saying in essence is that it is only the tip of the iceberg. The major problem we have today is acceptance of the need for totally integrated regional plans to deal with waste, to deal with all these things, whether it be landfill, incineration, recycling. The fact of the matter is that, yes, it costs money. There is no point in anybody here creating the impression that this is not going to cost. There is a cost involved in dealing with waste. The type of charge imposed on the individual is only a minimal contribution. There are landfill charges and things like that which are going to be significant contributors, and have to be.

There is no point either in creating the impression here that in some way things are not going to change. The cost of dealing with waste is going to have to be faced up to and like everything else it is going to cost more in the future and people are going to have to pay for it. Under the polluter pays principle this is inescapable. Even if we want the Government to provide £200 million in funding which will be scattered throughout the country we would be buried by the EU. We cannot do this.

Deputy McCormack

I want it scattered to reduce the waste, not to produce more of it. I do not accept as gospel the Department's argument that this will only be solved by an integrated regional plan. The problem will not be solved until counties and local authorities accept responsibility for their own waste. It will not be solved on a regional basis because it only spreads the problem. On the basis of the principle that the polluter pays each local authority should have a waste plan.

Chairman

Before adjourning on the Vote we will discuss the driver testing problems again at the next meeting. The committee has for some time been pressing for action on the local government audit. A working party is to be established. I suggest the committee should be represented by the Vice-Chairman and I and that a meeting be convened two weeks from now to start the discussion. We would be anxious for the group to give its views before the legislation is completed. Do you have a problem with this, Secretary General?

Mr. Farrelly

We have no problem with it. We are in your hands, Chairman.

Chairman

I will take the initiative and try to arrange a meeting for some time in the week commencing Monday, 30 January. We will also consider then the value for money audit on internal audits in the local authorities. As more than 50% of the revenues for local authorities are provided by the Exchequer there must be some direct accountability to the Exchequer. Local government audit committees cannot be independent enough to do the job they are supposed to do because of the unavoidable familiarity between local councils and local managers. There must be greater independence in terms of accounting, which is the reason a different approach is required.

In view of problems arising with issues such as waste, housing, road planning and long delays with road construction there is an urgent need for an inspector general for local authorities, somebody who will go in and vet local authorities without breaching the rightful devolving of power and decision making. There should be somebody who will report on the performance of local authorities under different headings such as waste, housing, roads and road maintenance. I heard a discussion on radio, which echoed something I have been feeling, about road maintenance, the fact that roads in Dublin city are being dug up and that amateur, higgledy-piggledy so-called temporary repairs are made, with the result that there are holes in the roads all over the city, destroying tyres on cars. The position has got worse rather than better and something will have to be done about the level and quality of those temporary repairs in terms of how they look and last because it is a disgrace.

Deputy Durkan

On appropriations-in-aid, I notice the receipts from the National Toll Roads were higher than expected. I would like if the committee could be furnished with the cost of the building of the toll roads to date, the receipt to the Exchequer from the toll roads and the projections from it.

Chairman

We are going on to roads now.

Deputy Durkan

Sorry, Chairman.