COMMITTEE OF PUBLIC ACCOUNTS debate -
Tuesday, 25 Jul 2006

Department of Social and Family Affairs — Rent Supplements.

Mr. J. Hynes (Secretary General, Department of Social and Family Affairs) called and examined.

Chairman

Witnesses should be aware that they do not enjoy absolute privilege. Their attention and that of members is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons identified in the course of the committee's proceedings. These rights include the right to give evidence; the right to produce and send documents to the committee; the right to appear before the committee, either in person or through a representative; the right to make a written and oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents and the right to cross-examine witnesses. For the most part these rights may be exercised only with the consent of the committee. Persons invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of them and provided with the transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interests of justice.

Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in Standing Order 156 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. I ask Mr. Hynes to introduce his officials.

Mr. John Hynes

I am accompanied by Ms Bernadette Lacey, who is the director general of social welfare services and is responsible for the delivery of social welfare schemes; Mr. Brian O'Raghallaigh, who is the assistant director general and whose responsibilities include supplementary welfare allowance; Mr. Don Watts, who is the principal officer in charge of supplementary welfare allowance; and by Mr. Kieran O'Dwyer, who is an assistant principal officer in that same area.

Chairman

I ask the representative of the Health Service Executive to introduce themselves.

Mr. Tony Quilty

I am director of social inclusion in the former Mid-Western Health Board.

Mr. Frank Mills

I am a director of social inclusion in the Dublin-mid Leinster area of the HSE.

Chairman

I ask the officials from the Department of the Environment, Heritage and Local Government to introduce themselves.

Mr. Des Dowling

I am assistant secretary for housing in the Department and I am joined by Mr. Eddie Lewis, principal officer.

Chairman

I ask the official of the Department of Finance to introduce himself.

Mr. Joe Mooney

I am from the public expenditure division in the Department.

Chairman

I ask the representatives of the Private Residential Tenancies Board to introduce themselves.

Ms Margaret Taheny-Moore

I am the director of the Private Residential Tenancies Board and I am accompanied by Ms Kathryn Ward, the assistant director.

Chairman

I ask Mr. Purcell to introduce value for money report No. 53.

Mr. John Purcell

This examination on rent supplements was undertaken in light of the very rapid increase in the level of spending on the scheme which went from €151 million in 2000 to €369 million in 2005. The examination sought to establish the factors which gave rise to the increased spending and if the Department of Social and Family Affairs had managed the scheme with due regard to economy during this period. We also looked at spending on rent supplements in the overall context of social housing provision and the recently introduced rental accommodation scheme.

We found that approximately one third of the increase in spending was related to increases in the number of recipients of rent supplement. They jumped from 42,700 at the end of 2000 to just over 60,000 at the end of 2003 and have remained around the higher level since then. The remaining two thirds of the increase in spending was related to increases in the average rent supplement payment which went up from approximately €74 per week at the end of 2000 to approximately €124 per week at the end of 2005. Most of this increase appears to be related to higher rents being paid by rent supplement households

The rents paid by rent supplement households are agreed between the tenants and their landlords but normally do not exceed the relevant rent limits set by the Department for different areas and different types of accommodation. In practice tenants and landlords have little incentive to agree rents below the rent limit levels. We found that six out of seven rent supplement recipients were paying rents equivalent to the relevant rent limits. This means that in setting the limits the Department is effectively setting rent levels for a sizable part of the private rental sector. As a result, it has considerable potential to influence rents in certain segments of the market but it does not actively seek to exploit this. For example, when market rents fell by approximately 10% between the start of 2002 and the end of 2004, the Department did not bring down the rent limits. I would have thought that selective lowering of rent limits when market rents fell could have resulted in lower expenditure.

The supplementary welfare allowance scheme, of which rent supplements are a part, was administered by the HSE on behalf of the Department and delivered through the community welfare service. Based on a review of individual case files in a number of areas we found considerable variation between offices in the way that rent supplement claims were processed and in the application of controls. The Department and the HSE have indicated that they intend issuing revised guidance to all community welfare staff on how the scheme should be administered so as to achieve greater consistency.

We also found that claims in payment are subject to a high level of review but that the rate varies between areas and in some of these cases overpayments of rent supplements are detected as a result of this review work. There is a need to make this more effective by developing methods to identify the extent of fraudulent or unwarranted recourse to the scheme and to improve the system for recovering overpayments where it is appropriate to do so. The Department and the HSE also need to sort out impediments that currently prevent prosecutions being taking against persons alleged to have carried out serious fraud and to adopt a policy of prosecuting quickly in those cases.

Rent supplement started out as a scheme to assist households that had a short-term need for assistance in meeting their housing costs until their temporary difficulties had been resolved but over the years many households have come to rely on it for extended periods. Our analysis showed that approximately 70% of those in receipt of rent supplements at a point in time are likely to be still in receipt of rent supplements one year later and approximately 55% are likely to be still in receipt of payments after two years. In practice rent supplement has evolved into a major social housing assistance programme in its own right.

The rental accommodation scheme was established on foot of a July 2004 Government decision. Under the new scheme local authorities will take on responsibility for meeting housing assistance needs of households receiving rent supplements for 18 months or more. It was estimated that approximately 30,000 rent supplement recipients would transfer to the new scheme but roll-out has been slow. By the end of 2005 only 505 recipients had transferred to the new scheme. I note that a central objective of the scheme is the achievement of better value for money in the provision of accommodation for households which would otherwise avail of rent supplement assistance but no specific targets have been set for the savings to be achieved.

Chairman

Would Mr. Hynes make his opening statement?

Mr. Hynes

The Comptroller and Auditor General's report is a wide-ranging one and it is also timely in view of the changes which are being made affecting the rent supplement scheme. All of the conclusions and recommendations in the report will be taken into account in the future development of the scheme.

As the report notes, the Department's role in the rent supplement scheme and the supplementary welfare allowance generally is one of general direction and control, while the scheme is delivered through the community welfare service of the HSE. The role of general direction and control involves responsibility for policy development and legislation on the scheme, the development of rules and guidelines on issues which arise in the course of implementing the scheme and measures to ensure consistent application of the provisions of the scheme. The Department is also responsible for funding the HSE in respect of scheme expenditure, monitoring that expenditure and preparing estimates and forecasts in respect of future expenditure.

The report was drawn up in advance of the recent Government decision to transfer responsibility for the administration of supplementary welfare allowance from the HSE to the Department. The implementation of that decision will require a wide-ranging review of the current administrative arrangements for the scheme.

The Comptroller and Auditor General's report draws attention to the need for measures to ensure consistency of approach across regions in the administration of the scheme. In this regard a best practice manual, which is referred to in the report, is currently being revised and will be finalised over the coming months.

The report argues, in particular, for a more structured approach to supplementary welfare allowance control activity. This issue is being addressed with the HSE and will feature in discussions and in the context of the new administrative arrangements. Other recommendations in the report, in the areas of control, risk assessment and internal audit, will also be followed up.

While the report raises questions about the effectiveness of existing control measures for rent supplement payments, it acknowledges the high level of claim reviews being carried out by the HSE. The priority for the future is to ensure control activity generally is targeted at the areas of greatest risk. The Comptroller and Auditor General found considerable variation in the extent and recording of control activity in the offices which were examined as part of the review and the issues raised in this regard will be addressed.

The main issues raised by the Comptroller and Auditor General relate to the substantial increase in expenditure on rent supplement over the period between 2000 and 2005 and the measures adopted to control this increase. The report notes expenditure increased from €151 million in 2000 to almost €370 million in 2005 and that some €390 million has been provided for the scheme in 2006. It focuses in particular on the increase in the levels of rent supplement paid as the main factor giving rise to the increase in expenditure over the period. Other factors, such as the increase in the number of recipients and changes in household composition are also noted as having contributed to the increase.

Since 2000, limits are set on the levels of rents in different areas in respect of which rent supplements are paid. Rent supplements are not paid where rents exceed the maximum levels set, except in exceptional circumstances. In setting rent limits, the Department takes account of information from the community welfare service on rent levels in local areas and of other information on rent levels generally. In particular, the report points to the importance of adjusting rent limits downwards when rents are reducing in the market to avoid extra costs for the State. Maximum rent levels were set by health boards up to November 2002. The Department then took over responsibility for setting maximum rent levels when the CSO showed evidence of continued reductions in rent levels. Recently, when market levels increased, the limits were not generally increased

The report shows in figure 3.1 the limits for most household types in four specified areas, as at autumn 2005, were at or below the corresponding average market rents. However, it also notes that the majority of recipients pay rents equal to the relevant limits. In that regard, the argument is made that the rent limits may act as a target level rent rather than a cap on rent.

The underlying objective is to ensure that clients have access to reasonable accommodation at rent levels which reflect the actual situation in the market. The Comptroller and Auditor General emphasises the importance of seeing the rent supplement scheme as an element of housing policy and argues for stating the scheme's objective in terms of the housing needs it is expected to address, rather than as simply an element of income support designed to address an income need, even if that need arises on foot of the need for accommodation.

The report draws particular attention in this context to the fact that rent supplement duration targets have not been set and that claims can continue in payment indefinitely. In practice, the rent supplement serves as a fall-back for many households waiting to avail of publicly assisted social housing and for others as an alternative to social housing provision. In this connection, it is clear — as the report acknowledges — that the role of the SWA rent supplement has over the years developed beyond the original objective of providing short-term assistance with accommodation costs. In particular, in the context of long-term payments it must be viewed in the context of housing policy generally.

In this connection, the establishment of the rental accommodation scheme under which local authorities assume responsibility for meeting long-term housing assistance needs through the development of contractual arrangements with private accommodation providers, along with social housing provision where appropriate, is a significant development. These arrangements when fully operational will enable the SWA rent supplement scheme to return to its original objective of providing short-term assistance with housing costs which cannot be met otherwise.

To date, over 6,000 rent supplement recipients have had their cases reviewed by housing authorities. Over 1,200 cases have transferred to local authorities under the new arrangements and a further 770 recipients/people have been provided with local authority housing. The target is to have 5,000 transfers by the end of 2006 and the total of some 31,000 long-term cases transferred by the end of 2008

I have addressed only some of the issues raised in the report, which has examined the rent supplement scheme in a comprehensive way. I and my colleagues will be happy to try to address any questions members of the committee may wish to raise.

Chairman

Thank you, Mr. Hynes. May the committee publish your statement?

Mr. Hynes

It may.

Deputy Ardagh

I welcome Mr. Hynes. On the matter of the rents, between the beginning of 2002 and the end of 2004, the Comptroller and Auditor General has stated that market rents fell by approximately 10%. He stated in his report that if there had been selective lowering of rent limits when market rents fell this could have resulted in lower expenditure. It appears from his opening comments to the committee that Mr. Hynes does not accept this view. He stated that maximum rent levels were set by health boards up to November 2002 and the Department then took over responsibility for setting maximum rent levels when the CSO rent index showed evidence of continued reductions in rent levels. Recently when market levels increased, the limits were not generally increased. Does Mr. Hynes accept what the Comptroller and Auditor General states in his report?

Mr. Hynes

The statements in the report are factually correct. The setting of limits in 2002 was a significant development for the Department in the sense that it was an attempt to cap rent supplements where rent levels were reducing. The Department does not necessarily want the limits to change frequently and rent levels to go up and down from time to time on a short-term basis. We watch the movement of rent levels on a local basis and the rent levels are changed as appropriate to reflect that movement.

Deputy Ardagh

The Comptroller and Auditor General seems to be critical of this. I do not know who is responsible. There was a potential for savings and for reducing rent supplements when the market rents fell. Does the Department accept there was a failure within the system to react to the fall in market rates and rents?

Mr. Hynes

The Department has not traditionally regarded itself as being in the business of setting rent levels. We are trying to respond to changes and to ensure people have adequate accommodation available to them, having regard to the rent levels in the marketplace. We keep on eye on the way rent levels move and try to reflect that movement in so far as that is reasonable. The level at which rent limits will be set is a policy decision. The Department does not wish to have to change those limits too quickly or too frequently.

Deputy Ardagh

The Department does not accept what the Comptroller and Auditor General has stated in his report.

Mr. Hynes

We would differ in our interpretation of what happened.

Deputy Ardagh

I refer to Mr. Hynes's opening statement in which he refers to the report of the Comptroller and Auditor General. He stated:

However, it also notes that the majority of recipients pay rents equal to the relevant limits. In that regard, the argument is made that the rent limits may act as a target level rent rather than a cap on rent. . . Rent supplements are not paid where rents exceed the maximum levels set, except in exceptional circumstances.

The people in receipt of rent supplements are vulnerable and generally poor and have difficulty in finding accommodation. Where the rent levels are similar and the system does not allow a greater amount to be paid, is Mr. Hynes aware that very many tenants must pay additional cash to landlords in order that the market can operate at that poor level?

Mr. Hynes

The limits we set are intended to reflect the reality by reference to the rent levels and the information that we get on the actual rent levels. There is provision for people to be supplemented over and above the limits where there are particular circumstances in play, for example for people with disabilities or in other circumstances that might apply. The HSE has a discretionary power to apply that if there are particular circumstances.

Deputy Ardagh

I was getting at another issue. In the Dublin area generally what is the level of rent supplement for a family with two children?

Mr. Hynes

It is approximately €1,200 per month.

Deputy Ardagh

There are very few accommodation units in Dublin that are adequate for a husband, wife and two children at a monthly rent of €1,200. In a number of cases the limit is set by the rent supplement system at €1,200, but in order for the demand to be met some landlords take €200 or €300 in cash over and above the €1,200 because both of them are in a bind. The person on rent supplement cannot get rent supplement if he or she is paying €1,500 and the landlord is not prepared to give it at €1,200 without getting extra money. Given the large number of rents at €1,200, the market conditions that apply in all forms of accommodation, trade and business encourage some element of cash payment of rent by those on rent supplement. Would Mr. Hynes like to comment?

Mr. Hynes

Obviously, we would not approve of that if that is the right phrase to use.

Deputy Ardagh

Absolutely.

Mr. Hynes

There is not much evidence available to us that the existing limits are causing that type of problem. We have a dilemma. On the one hand, if we set the limits too high there is a danger that we will increase rent levels generally.

Deputy Ardagh

Yes.

Mr. Hynes

If we set them too low we have the type of problem the Deputy has identified. I suppose a balance needs to be struck. However, in so far as we can get this information, we try to reflect what the actual rents are locally. The local community welfare service will tell us its experience with people coming to it looking for accommodation. We try to take account of that.

Deputy Ardagh

Is there any anecdotal evidence from the reports of community welfare officers, either formal or informal, that there is a small cash element creeping into the system or already in the system and may have been in the system for a while?

Mr. Hynes

Comments of that kind are made from time to time and people suggest that it should be possible for people to pay over the limits if they want and that if somebody wants to pay in excess of the rent limits that we specify he or she should be free to do so even though the rent supplement is capped. The policy is that we do not supplement where people pay more than the rent specified in the limits.

Deputy Ardagh

It is a difficult problem that should be addressed. I would like to refer to the Private Residential Tenancies Board. I thank Ms Margaret Taheny-Moore of the board for attending this meeting.

There is a significant social problem in respect of rent supplement tenants, in particular. Approximately one third of publicly assisted housing is provided by means of the rent supplement scheme. Under the legislation relating to anti-social behaviour, which was passed recently, local authorities can evict people who engage in such activity. People who are evicted by Dublin City Council end up in private accommodation elsewhere in the city. There has been an increase in the prevalence of rent supplement clients in certain parts of Dublin. Significant problems are being caused by anti-social behaviour in some areas. The Health Service Executive recognises that there has been a significant intensification of such behaviour in a particular area with which I am familiar. I accept the HSE manager in the area in question dealt with the problem by asking a project officer to go there to see what could be done about it.

I recently attended a meeting in the Fatima Mansions area, where many buildings have been pulled down. I learned that there are eight tenants in a certain house, three of whom receive rent supplement payments and five of whom do not. There does not seem to be any income. There are problems with drugs, cash from drugs and drunkenness. The lives of the other people living on the road in question are intolerable. Some elderly people in the locality are afraid of their lives when they leave their houses.

Dublin City Council used to house the people who are now causing problems in some of its properties. It had substantial resources to do something about anti-social behaviour. The council could talk to tenants, for example. The problems to which I refer are now concentrated in certain parts of Dublin, where private tenancies are being arranged between landlords and tenants. The local authority no longer has responsibility for such people. The HSE, which pays the rent, stays as far away as possible from these problems. I understand from the report submitted by the Department of Social and Family Affairs that it draws up policies, sets out parameters and puts in place control mechanisms. It outlines what should happen. The Garda Síochána tries its best. Deputy Curran recently told me that the Private Residential Tenancies Board has some responsibility in cases of tenancies. Local people can make complaints to the board about these matters. I do not refer to an individual case, but to a significant overall problem that is encountered throughout the inner city and the outer inner city. This problem is also found in the outer suburbs of Dublin. I do not know whether it applies in Waterford or Cork.

Can Ms Taheny-Moore give the committee some information in this regard? Who is able to make complaints about tenants in private residential tenancies? How can one make such a complaint? How are such complaints dealt with? What remedies are available to complainants? Does the Private Residential Tenancies Board have sufficient resources? Does it need more resources to deal effectively, promptly and expeditiously with complaints of this nature? Does the board need more co-operation to allow it to stage an intervention of some description?

Ms Taheny-Moore

I will outline the role of the Private Residential Tenancies Board in dealing with anti-social behaviour. Section 16 of the Residential Tenancies Act 2004 lists explicit tenancy obligations including a requirement not to engage in or permit anti-social behaviour. Section 17 of the Act defines anti-social behaviour as behaviour within a dwelling which constitutes the committing of an offence or causes fear, danger, injury, damage or loss. Under section 15 of the Act, a landlord is required to enforce the obligations of a tenant so that a third party who is directly affected by a failure to do so may refer a complaint to the PRTB. The third party must be directly or adversely affected by the tenants who are causing the anti-social behaviour. Before making a complaint, a person must communicate or attempt to communicate with the landlord to resolve the matter. If this approach fails following a number of steps, the third party may complain directly to the PRTB. The PRTB can also assist third parties to identify landlords and provide them with names and addresses although it must be first proved a third party has been affected directly. When we have established that a third party is directly affected, we permit the submission of a formal complaint to be dealt with under the disputes system. The complaint may be the subject of mediation, adjudication or a tribunal hearing. Of the 1,000 cases and applications received from third parties, approximately 5%, or 46, related to anti-social behaviour.

Deputy Ardagh

Third parties must prove they are directly affected. How can they do so before making a complaint?

Ms Taheny-Moore

Such a third party would be living next door to or behind the dwelling which is identified as the scene of the behaviour. The third party must live close enough to the dwelling.

Deputy Ardagh

How does a third party prove he or she is living in fear of his or her life?

Ms Taheny-Moore

The third party identifies the dwelling and tells us where he or she lives. In some cases, third parties have reported matters to the gardaí who in turn lets us know of the complaint and can provide evidence that anti-social behaviour is taking place.

Mr. Hynes

Under the Social Welfare Act, the power exists to refuse rent supplement in cases where a person has been evicted from social housing by virtue of anti-social behaviour.

Deputy Ardagh

I accept that.

Mr. Hynes

While one must be mindful at local level of circumstances and the need to accommodate people, the community welfare service has that power.

Deputy Ardagh

While I accept the point, rent supplement recipients are not the only people involved. In one of the cases I mentioned, three people were in receipt of rent supplement while five were not. I imagine the reason those five were not in receipt of rent supplement is that it was refused. There is still a problem with the tenancy however. I want people to understand that if they have a problem directly with a particular tenancy, the Private Residential Tenancy Board accepts that it has responsibility for the matter and will hear complaints and take effective action.

Ms Taheny-Moore

We can provide information where a tenancy is registered. If a tenancy is not registered, we are not in a position to identify the landlord or tenant.

Deputy Ardagh

What happens when a person identifies a private residential tenancy?

Ms Taheny-Moore

If the complainant identifies the landlord, we can write to him or her on the enforcement of the registration of the tenancy.

Deputy Ardagh

Is the onus, therefore, on the complainant to find out who the landlord is?

Ms Taheny-Moore

If the complainant has the name of the landlord——

Deputy Ardagh

What if he or she does not?

Ms Taheny-Moore

May I call on my colleague, Ms Ward?

Deputy Ardagh

Of course.

Ms Kathryn Ward

It is an issue because third parties who do not know who the landlord is have called us. There is a gap in that area because we do not have resources to find out who the landlords are. If the caller can identify the house, we write to the tenants asking them to provide information. Sometimes they do and sometimes they ignore us. At the moment we are not putting resources into chasing up landlords whom we do not know, who are not in the system or whose contact details we do not have.

Deputy Ardagh

The PRTB has a responsibility to take action in respect of private tenancies but it cannot do so because it does not know who the landlords are.

Ms Ward

In certain cases we cannot do it. A third party has the right to come to us with a dispute about an anti-social tenant and we have a responsibility to hear that case and make a determination on it. We do that when we have all the details but there are cases in which neither we nor the third parties know the name of the landlord. It has not been our practice because we do not have the resources to conduct Land Registry searches or whatever might be required to locate the landlords. We try by following up with the tenants to find the name of the landlord or the agent.

Deputy Ardagh

What resources does the PRTB have and what resources would it need to deal effectively with the regular complaints?

Ms Ward

There have been few complaints from third parties.

Deputy Ardagh

They will increase.

Ms Ward

Yes, they will increase as people become more aware of us and what we do. When we act, we do so effectively. A tribunal can be set up to deal with serious anti-social behaviour within 21 days and it can determine that the tenancy must end. We do not have the resources and, without knowing the high numbers of complaints, it is difficult to say what type of resources we would need to perform searches for absent landlords or those who do not meet their obligations or ensure that their tenants meet their obligations.

Deputy Deasy

Initially, the rent supplement scheme was set up to deal with short-term housing needs. Between 2000 and 2005, this scheme has cost €1.6 billion. It has taken on a life of its own to become a monster into which we are pouring millions of euro. How did it go from being a scheme to deal with short-term housing needs to something that cost the State €1.6 billion over five years?

Mr. Hynes

It has been 30 years since legislation was enacted to introduce the supplementary welfare allowance scheme and circumstances have changed drastically in that time. The scheme was originally seen as a response to a problem of that time of people who needed short-term assistance with their rents. Long-term difficulties were seen as the responsibility of the housing authorities. Circumstances have changed over that period. Many more people claim rent supplements and the scheme must be seen in the context of what is happening generally in the housing market, even though it was intended as an income supplement rather than a housing scheme.

Deputy Deasy

How does the Department spend €1.6 billion over five years? As the Comptroller and Auditor General has said, the Department has no explicit objectives in terms of the housing impact the scheme should achieve. How is €1.6 billion poured into this without any objectives being set out for the impact the scheme is having on the housing market and the people involved in it?

Mr. Hynes

The objectives of the scheme are very clear. They are to assist people who need income support to pay for their accommodation.

Deputy Deasy

However, there were no curbs on the growth of the scheme over five years.

Mr. Hynes

I would not accept that.

Deputy Deasy

There were no controls or reviews in some cases.

Mr. Hynes

The report indicates that the Health Service Executive carried out regular reviews of rent supplement recipients over that period. The rent limits that were set from 2002 onwards are another factor or element of control. We are trying to meet the need that exists for accommodation and for support in accessing it.

Deputy Deasy

It has failed, has it not? A decision was taken recently to take it from the HSE and bring it back to the Department. There are obvious major malfunctions within this system which have been identified, and this has been acknowledged. Why would this be done otherwise? It seems to me that taking on the rental accommodation scheme is another indication that it has not worked and that the spending amounts involved must be curbed.

Mr. Hynes

I do not accept that such a conclusion can be drawn.

Deputy Deasy

In that case, why is it being changed? Why is it going from the HSE back to the Department?

Mr. Hynes

That is an issue which has been on the agenda for a long time. This applies not just to rent supplements but to supplementary welfare allowance provision generally.

Deputy Deasy

It accounts for about half of it.

Mr. Hynes

It is regarded as more efficient because the Department is responsible for the policy and direction of the scheme. It is logical that the Department should be responsible for the administration of the scheme, especially since a great many people on supplementary welfare allowance await a basic social welfare payment any way. This means that there is a great deal of contact between the HSE and the Department in the administration of the system.

Deputy Deasy

I will just turn for a moment to the issue of overpayments. The Department did some reviews in Galway, Clonmel, Mulhuddart and in a specialised housing unit. In three of the areas the reviews resulted in rent supplements being reduced or stopped in 20% of cases, meaning overpayment, fraud or mistakes. That is a large sum of money equivalent to a fifth of €1.6 billion, which accounts for more than €300 million over five years for fraud, overpayment and essentially mistaken payments to individuals. That is an extraordinary amount. Will Mr. Hynes respond to that?

Mr. Hynes

I do not approve of the Deputy's arithmetic.

Deputy Deasy

That is fine.

Mr. Hynes

One cannot assume that because a number of cases had their rent supplement payment changed——

Deputy Deasy

Is the Department still accounting for——

Mr. Hynes

The Department cannot put a figure on the extent of the fraud.

Deputy Deasy

That is the problem. It should be able to. A total of €1.6 billion has been spent after five years. It has been pointed out that the Department does not have the controls or the review structure in place. Communication does not exist between the HSE and the Department of Social and Family Affairs. Can Mr. Hynes not give a rough figure for the overpayment rate, the fraud or the mistakes in the system? A difficulty arises when that question cannot be answered, because we are potentially dealing with hundreds of millions of euro.

Mr. Hynes

The report does not indicate there is a serious issue with control of the scheme. A substantial proportion of cases are reviewed on a regular basis. We are trying to assess the actual level of fraud and error in the social welfare schemes, which has arisen from a previous report on social welfare conducted by the Comptroller and Auditor General. I accept we need to have better information about the extent of fraud and error. We are carrying out surveys to identify that, but it is not easy to get information.

Deputy Deasy

That is fair enough, but the Comptroller and Auditor General made some very basic points. He said there is no means of identifying accurately how much overpayment of rent supplements has been discovered by the community welfare officers and there is no means of discovering the rate of recovery of payments. He said community welfare officers do not formally inform the Department of overpayments they discover, which is unbelievable. He also said partial recording of overpayment on debtors was noted and that there is no repayment method except by cash to community welfare services offices during working hours. His last point was that it is unlikely there will be any significant recovery of debts identified. That is a pretty serious litany of problems identified by the Comptroller and Auditor General, which deals potentially with hundreds of millions of euro.

Mr. Hynes

I do not disagree with the Deputy's point that there needs to be a good system of control for the scheme. I disagree, however, with the argument that it currently does not exist. Arrangements are in place for community welfare officers to recover overpayments that are identified. We are trying to tighten up that policy. The report highlights the need for discussion with the HSE on tightening up and improving the existing arrangements. The arrangements exist and the system has been manual for a long time. It is very labour intensive and requires much work by community welfare officers just to put supplements into payment. We are currently discussing with the HSE the level of control to see if it can be improved. We are trying to assess the level of fraud involved.

Deputy Deasy

Mr. Hynes spoke about the new rental accommodation scheme. He said the Department was returning to the original objective of providing short-term assistance for housing costs. How is that scheme working?

Mr. Hynes

We are at the early stages of the scheme. At this stage, 1,200 cases have been transferred from rent supplement to the rental accommodation scheme, which is administered by local authorities.

Deputy Deasy

How many are off that scheme now?

Mr. Hynes

They are off the supplementary welfare scheme.

Deputy Deasy

I know that, but what about the new scheme?

Mr. Hynes

They are on a system in which the local authorities will arrange for accommodation. The local authorities will use an accommodation-based system.

Deputy Deasy

Will they pay the rent directly?

Mr. Hynes

They will make an arrangement with the landlord to provide accommodation for people in that situation. That will make the system directly related to accommodation, rather than paying money directly to the client.

Deputy Deasy

How much savings are expected to be made from this scheme?

Mr. Hynes

It is too early to say what the net effect of the scheme will be. I cannot comment on whether it is more expensive to provide accommodation directly for someone or to provide that person with financial assistance to get accommodation.

Deputy Deasy

What was the purpose of the scheme? Was it to save money?

Mr. Hynes

It was felt more appropriate that people with long-term housing needs would be catered for by local authorities because the authorities are in a better position to assess whether those needs can be met through social housing, through assisted accommodation of one type or another, or through making direct relationships with local landlords. It was felt the results would be more effective.

Deputy Deasy

The Comptroller and Auditor General pointed out that there was considerable variation in how the rent supplement scheme was administered in different HSE regions. Will the HSE officials explain why this was the case?

Mr. Quilty

Reference was made in the report to the level of control and supervision. This can be affected by something as simple as the ratio of community welfare officers to superintendents. In one area, 25 community welfare officers report to a superintendent whereas in another area only six officers report to a superintendent. This means all superintendents are not able to give the same amount of time to examining forms.

With regard to overall control, it would be remiss of the HSE to accept that the level of control is not as it should be. There is a large degree of local control. Much time is invested at the investigation stage by community welfare officers, who then risk assess each case at local level on a three or six monthly basis, depending on factors such as whether the person is old or young, transient or has a history of moving around the country, and the level of income involved. Much local knowledge has been acquired over the years as well as contacts with our colleagues in the Department of Social and Family Affairs and the local authorities in terms of using information that is available through the payments system and the Department of Social and Family Affairs computer systems.

Deputy Deasy

My final question is for Mr. Hynes. I deal every day with people who use the scheme, which is helpful to them. However, given the amount of money involved, the lack of checks in some cases and the lack of prosecutions in cases of fraud, have we created a system of dependency within the rent supplement scheme, which began as a short-term housing needs scheme?

Mr. Hynes

That is a major issue. We have tried to respond to the needs as we find them. The report does not indicate a huge problem with control of the expenditure. Moreover, a high level of review activity is taking place, as the HSE representative pointed out. Through the rental accommodation scheme, we are getting to grips with the long-term dependency element of the scheme. People in that situation should be catered for through the local authorities and through whatever form of assisted housing——

Deputy Deasy

There is an element of that, which has been acknowledged in the new scheme. That is fair enough. Mr. Hynes's point on moving the responsibility to the local authorities is a good one, with which I agree. However, there is a difficulty in that this needed to happen much sooner. We have, to an extent, created a system which leans on the side of dependency, which is unfortunate.

Mr. Hynes

We must respond to the reality. If people require assistance with housing on a long-term basis, we must find the best way of providing that. It does not mean we have necessarily created this need. We have responded to it because the scheme is one of the weapons that can be used to respond to it. We believe the local authority approach is potentially more effective. We will see how the scheme works in practice but it would appear that this approach is more effective in the long term.

Deputy Deasy

I thank Mr. Hynes.

Deputy Curran

I have a number of short questions. In Mr. Hynes's opening statement, it was stated that rent supplements are not paid where rents exceed the maximum levels set. In the same paragraph it states that when market levels increased recently, the limits were not generally increased. Does this statement indicate that the Department was previously paying over the odds?

Mr. Hynes

As I said earlier, we try to set limits on a periodic basis by reference to movements in rent supplement.

Deputy Curran

Let us be specific. If the Department has not increased limits now, which is what Mr. Hynes is saying, does he believe that rent supplement was previously driving the market?

Mr. Hynes

I do not agree with that assertion. We were responding——

Deputy Curran

That is fine. If the Department was not driving it and rents have increased but the Department has not increased the limits, does Mr. Hynes believe the Department is now behind the market?

Mr. Hynes

The limits were last set in the middle of 2005 and are due to be reviewed this year.

Deputy Curran

I ask this question in the context of Mr. Hynes's statement because he stated that when market levels increased, the limits were not generally increased. Either the limits are correct now or they were correct previously. It is not possible to have it both ways. The Department was either overpaying previously or it is underpaying now.

Mr. Hynes

It depends on how frequently one can or should adjust rent limits. Rent levels go up and down frequently.

Deputy Curran

To be fair and with one exception, they tend to increase.

Mr. Hynes

They have come down on a number of occasions in the last five years so we try to keep the limits steady for as long as possible but respond to developments.

Deputy Curran

I do not want to get too bogged down but I want to be specific. Deputy Ardagh cited the example of a family with two children. In response, Mr. Hynes stated that the maximum was €1,200. Deputy Ardagh then asked about people who pay €1,500 for this type of accommodation. Mr. Hynes replied that the Department did not have evidence of it and referred to what local community welfare officers indicate. This is fine up to a point. The PRTB has tens of thousands of tenancies and types of accommodation registered. Does the Department cross-reference its information with that of the PRTB?

Mr. Hynes

Yes, we do. This cross-referencing will increase as we go ahead.

Deputy Curran

Are the Department's rates based on the information registered with the PRTB?

Mr. Hynes

We get information from the community welfare service.

Deputy Curran

Tens of thousands of individual tenancies throughout the country are registered with the PRTB. Accompanying this registration, if I am correct, is information concerning the type of accommodation and the rent. This is supposed to be registered. Is the Department using this information to formulate policy regarding what rent supplement is to be?

Mr. Hynes

To be fair, the PRTB has been in existence for a relatively short period. This information would not have been available to us when we were setting limits previously. When we get around to setting the limits next time around, we will certainly——

Deputy Curran

The PRTB has been in existence for some time and tens of thousands of tenancies are registered with it. Is it fair to say that the figures paid by the Department have not drawn on the information that resides with the PRTB?

Mr. Hynes

That is true. We have not used information from the PRTB up to now, but in the future, we will have regard to information we receive from the PRTB.

Deputy Curran

I share Deputy Ardagh's concerns. While €1,200 is the maximum amount for a family, I know of many single people, for example, lone parents with one child, who are probably in a worse situation because the limit is lower and they pay top-up cash. There is a difference between this figure and what the market is bearing. We could talk about this matter in an academic fashion all day but the factual information resides with the PRTB and should be used. How many tenancies are registered with the PRTB?

Ms Taheny-Moore

Approximately 106,000 tenancies are registered with the PRTB.

Deputy Curran

Before the PRTB was formed, these tenancies would have been registered with local authorities. The maximum number of registrations at any point in time would have been 30,000 or 40,000.

Ms Taheny-Moore

That would be correct.

Deputy Curran

When the PRTB came into being, was it expected that there would be more than 100,000 registrations?

Ms Taheny-Moore

That was the expectation because there were many unregistered landlords. We are delighted but not surprised to have exceeded expectations.

Deputy Curran

Was the PRTB staffed to deal with 100,000 or so?

Ms Taheny-Moore

Yes. We have a permanent core of 26 staff, but we also use the Adecco agency for staffing for data entry, which is the largest part of the job.

Deputy Curran

Is there a backlog or are most tenancies registered quickly?

Ms Taheny-Moore

The backlog varies from four weeks to five weeks, but applications have increased in recent weeks. They have exceeded 400 per day.

Deputy Curran

Is there any particular reason?

Ms Taheny-Moore

It relates to tax.

Deputy Curran

There is an onus on landlords to register. However, alongside dispute resolution and so forth and the Bill to which Ms Taheny-Moore referred, the PRTB has the responsibility to follow up on these matters and there are severe penalties if it fails to do so.

Listening to Ms Ward, it was interesting and disappointing to learn that the PRTB has taken either no or limited practical measures to pursue landlords. It is the first instance I have heard of this being stated so publicly. Apart from writing to a tenant, there are no means of pursuing landlords. For example, does the PRTB discuss this with the Department of Social and Family Affairs, which often pays cheques relating to this area?

Ms Ward

Yes. We regularly speak with the Department when we are given a case dealing with rent supplement or whatever, especially where rent is not being paid. We have a good working relationship with community welfare officers, with whom we often speak to determine whether rent is being paid.

Deputy Curran

Is it fair to say that if a person adversely affected by anti-social behaviour telephoned about a particular house that is not a registered address, the PRTB's first port of call might not be that house's tenant, but the local community welfare officer to determine whether the tenant is receiving rent supplement?

Ms Ward

That would be a standard check. If rent supplement is being paid, we will follow the matter up with the community welfare officer. While we do not have a section to examine landlords of whom we are unaware, I do not accept that we address or dismiss this matter lightly. Where possible, we make whatever efforts to chase landlords we can. We ask the person making the complaint to determine whether the local gardaí can help to trace the landlord, as they have greater facilities to do so than the PRTB.

Deputy Curran

In my area, there are a great deal of private rented houses and I have heard many comments about the PRTB. It is interesting that the PRTB has received approximately 1,000 complaints, 46 of which were on anti-social behaviour. According to my constituents, the reason for this is that they cannot get through to the PRTB by telephone, such is the volume of complaints. I do not say this flippantly, as people being unable to get through seems to be a real problem.

Ms Taheny-Moore

We curtailed our afternoon telephone service to clear the backlog in processing landlords' applications for registration. We have reduced the backlog to four weeks or five weeks and, as we continue, that time will decrease to two weeks. We will review the operation of the telephone system, but we will probably not be in a position to return to a full day's service until September. The public office is open from 10 a.m. to 1 p.m. and from 2 p.m. to 4 p.m. every day. We received more than 2,018 referrals about unregistered landlords from local authorities, individuals and residents' associations. We write enforcement letters to landlords, some of whom speedily respond that they will register.

Deputy Curran

Is Ms Taheny-Moore stating that from September, people will be able to make initial contact by telephone to lodge a complaint?

Ms Taheny-Moore

There is no reason they cannot do so now.

Deputy Curran

They cannot get through.

Ms Taheny-Moore

We have a website and an e-mail address which can be used, or the information can be faxed.

Deputy Curran

My last point in regard to the Private Residential Tenancies Board is on the list of tenancies contained on its website. While the list is useful, it would be more user-friendly if one could input an address and perform a search. One must scroll through quite a large list to determine whether a property is registered.

I am not sure whether my next question should be addressed to Mr. Hynes, the Department of Finance or the Department of the Environment, Heritage and Local Government. The impression is often given that rent supplement is dead or wasted money because the recipient is renting. However, it can be considered another way. If it were not provided, the recipient would have to be provided with the capital cost of a house. It is interesting to note that in private businesses, one sees large companies selling their assets and renting them back to free up capital. In general terms, particularly regarding the longer-term rental accommodation scheme, has any Department carried out a cost-benefit analysis on the provision of social housing and rental accommodation?

Mr. Hynes

In recent years, we conducted a small study on the comparative costs of various methods of providing housing. I am not sure we reached many definite conclusions. However, we will follow up on that study and conduct more analysis. It is difficult as it depends on circumstance, area and size of the family. It is not conclusive as to whether it is cheaper to provide public housing or private assistance. It is an issue to be considered in the long term.

Deputy Curran

I will conclude on this point. I do not have a problem with the rental accommodation scheme. I see its merits and understand it. Rental accommodation allows for better social integration than building thousands of social houses in one area. That aside, I find it difficult to understand why cost benefit analysis, which would have a bearing on many issues, was not carried out. Perhaps the Department of Finance has a view on it. It would help in many ways if people realised costs are incurred on all sides, whether it is the capital cost of social housing or the cost of rent. It is not strictly correct to view rental accommodation as dead money. Social housing incurs other costs, such as maintenance. I do not know the answer, which is why I posed the question. I am disappointed cost-benefit analysis was not conducted. The number of people involved means the amount of money spent annually is substantial. If cost benefit analysis has not been conducted, it should be.

Mr. Mooney

I am not aware of any study conducted by the Department of Finance or elsewhere. Perhaps my colleagues from the Department of the Environment, Heritage and Local Government, who are more involved in housing, may know of a study.

Mr. Dowling

It would be useful to note the rental accommodation scheme put in place to meet long-term needs is one of a variety of mechanisms. Research into this issue has been carried out over the years, most recently by the NESC. The conclusion the latter came to was that it is valid to have a variety of approaches. The report of the Comptroller and Auditor General, No. 53, which is comprehensive, seeks to ascertain how one might estimate the costs and benefits of different approaches. It is difficult to do this for the reasons already outlined by the Secretary General, Mr. Hynes. It is not just an issue of value for money in terms of the cost of different approaches. One must also take account the needs involved and the choices that will be available to people. Such choices may relate to choosing to remain in the rental sector or, alternatively, having access to a local authority, voluntary or, if circumstances allow, an affordable house.

The Department recognises that the range of delivery mechanisms should continue and as part of Towards 2016, the new draft partnership agreement, it will be working with various stakeholders to determine the best approach to these matters, recognising that different delivery mechanisms are required relative to need.

Deputy Dennehy

Those of us who have served on local authorities, health boards and so forth have heard the argument that rent supplement is a waste of money and the simplest approach is to build new houses with the money. However, if there are 60,000 claimants at any given time receiving rent subsidy, we simply cannot build a sufficient number of houses. What does one do with the 40,000 or 50,000 claimants for whom houses cannot be built? Has the issue been examined in that context? How would the Department answer the simplistic argument that instead of spending €140 million on rent subsidy, it should just build new houses for people?

Mr. Hynes

That is the approach being taken with the rental accommodation scheme in the sense that more than 30,000 of the recipients of rent supplement will transfer to the new arrangements and come off the rent supplement scheme. Many people who claim rent supplement are short-term claimants for whom renting is the only viable option. The question has been raised whether we should examine alternatives, such as providing housing directly to the people concerned. Work has been done on this issue. The Minister is interested in examining that as an option but it is not something we have actively examined up to now. The rent supplement scheme is supposed to be a short-term measure to address a short-term need. The viable option for most people with a short-term housing need is to rent.

Mr. Dowling

I wish to supplement what Mr. Hynes has said by pointing out that among the transfers that have been provided so far, this year and last, more than 900 have gone from supplementary welfare allowance to social housing. It is not just a case of people going into the rental accommodation scheme where a long-term need has been established. There is also a supply response in terms of social housing along with all the other measures I have mentioned.

Deputy Dennehy

I ask the representatives to provide a more detailed explanation of the new scheme. Even if one takes the figure of 900 into account, that still leaves more than 59,000 people claiming rent allowance. Is it intended to purchase some of the private rental accommodation or to enter into long-term contracts? What is involved in the new scheme?

Mr. Dowling

It is a complex set of arrangements. The Department has identified, among the 60,000 claimants, at least 30,000 who seem to have a long-term accommodation need. In that context, we needed to put in place something other than the payment system that had been in operation for some time. The intention was to introduce an arrangement whereby local authorities could secure a supply of long-term accommodation of good quality which would meet individual needs. That could be done through existing landlords, where local authorities are satisfied with the quality offered, or new mechanisms, such as public private partnerships, to secure larger supplies of accommodation and, hopefully, higher quality and better value for money.

The roll-out of the new scheme demonstrates that the quality of accommodation for many current recipients is not very high. This has presented a challenge in making serious inroads into the problem because the quality of accommodation is often not at a level which would persuade us to enter long-term maintenance contracts. We have strong reasons for adopting longer-term approaches, such as the one we are pursuing through the rental accommodation scheme, alongside existing approaches on social housing provision. As Deputies will be aware, more than €2 billion has been provided this year for social and affordable housing measures.

Deputy Dennehy

While it is important for us to discuss the macro level and the ways in which the Department could influence market rents, each of the 60,000 recipients in question represents an individual hardship case. We could tell someone that he or she is paying too much rent, but a reduction is almost impossible to achieve in practice. I appreciate that efforts were made in Dublin to put a cap on rent, but the success of such initiatives depend on individual tenants.

Does Mr. Hynes agree that the rent supplement scheme led to a massive increase in the cost of rented accommodation? These 60,000 captive renters, who otherwise would not have had a hope of accessing private rental accommodation, form one third of the market. I do not suggest every landlord is exploiting the scheme, but I know of cases where people have been exploited.

Mr. Hynes

The issue raised by the Deputy cuts across social welfare provisions. How do we cater for genuine needs without giving rise to unattractive consequences? The alternative to providing rent supplement is homelessness, which we want to avoid. We are trying to respond to situations as they arise. I have no doubt that the existence of the scheme is a factor in the housing picture, but I am unsure whether an alternative approach is possible.

Deputy Dennehy

Attitudes on how well this scheme has worked vary according to whether one is a taxpayer or a social welfare recipient. The scheme has been successful in terms of housing 60,000 people. The numbers of recipients increased massively between 2001 and 2003, then levelled out. Is there a reason for such a large increase within a two-year period?

Mr. Hynes

I ask my colleague, Mr. O'Raghallaigh, to respond.

Mr. Brian O’Raghallaigh

A number of factors are relevant, one of which is the fact that various Ministers, in successive budgets, introduced income disregards to encourage people to make the transition from welfare to work. That resulted in an increase in the number of people who worked part-time and received rent supplement. In previous circumstances, the rent supplement would have been cut if a person had any other income. Another reason was the fact that unemployment figures, having been positive until 2001, rose sharply in 2002 and 2003 and fed a part of the increase.

Deputy Dennehy

All of us have tried to encourage people to take advantage of income disregards. We ran into trouble over the back-to-work and education schemes. People claiming in all categories in the past five years except for the back-to-work and education schemes, where the figures dropped from 13% to 6%, told us they would lose their subsidy if they went back to work. What is the specific problem in that regard?

Mr. O’Raghallaigh

It may be a result of success. The back-to-work allowance is available on a reducing basis over three years. In the fourth year a person is outside the scheme, which is a positive outcome. That the number of people receiving allowances now is lower is a reflection of the fact that the economy is much stronger than it was ten years ago.

Deputy Dennehy

The statistic is striking. It relates to an area in which we have had the most trouble. We have had to claim subsidies on behalf of people, arguing with community welfare officers in the process.

I resisted the transfer of responsibility for the scheme from the HSE to local authorities. It was decided in principle some seven or eight years ago. I felt staff in community welfare services responded much better than those in the housing sections of local authorities. In the interest of recipients rather than the overall cost, I argued for the scheme to remain as it was, but the Comptroller and Auditor General seems to agree with the change.

It is not a waste of money. As Deputy Curran said, it depends on how the money is spent. We would have to spend three times the figure if we built houses. I hope benefits will accrue from the report.

Deputy J. Higgins

With €1.6 billion spent in five years on the rent supplement scheme, an annual spend of just short of €400 million, and with 60,000 families now dependent upon it, would it be fair to sum the scheme up as an ad hoc measure which has developed to make up for the fact that speculators in the housing market have been allowed to put a home out of the reach of ordinary working people on standard wages? The State now builds far less social housing than it built in decades of much less wealth. This has thrown into the lap of the landlords a whole cohort of people which would otherwise not exist. It helps to create a situation wherein landlords can rack-rent at will and the taxpayer contributes a large amount to make up for it. This is not satisfactory for the people who are dependent on it and it is a mess.

Mr. Hynes

The report points out that the rent supplement scheme can be seen as an alternative to social housing provision. This is the response people with housing needs have received. There is a mixture of approaches and it is a matter of opinion whether there is too much or too little of a particular form of housing support. We are sending people with long-term housing needs to the local authorities and this is a significant step that allows the proper response to be developed.

There are a variety of reasons the number of people receiving rent supplements has increased in recent years. We have been responding to people's needs. As the report points out, there are various effective controls in place to ensure people are not exploited through the scheme. The introduction of new arrangements for those receiving long-term supplements represents a further improvement. I do not wish to debate the overall response to people with housing needs but we have been reasonably effective in responding within the limits of the scheme.

Deputy J. Higgins

It is a bonanza for speculators and private landlords. Even allowing for the rental accommodation scheme, rent supplements provide much less stability for the recipient than local authority housing. The landlords who enter into these contracts with local authorities can pull out.

Mr. Hynes

That is the system we have. There is a private rental sector that has an important role to play in the provision of housing support. It is important that the system responds to the needs of recipients and also has regard to the issues facing landlords in the provision of accommodation. Deputy Higgins is raising a broader issue, but within the limits of the schemes we have been reasonably effective in ensuring people have reasonable accommodation at not too high a cost.

Deputy J. Higgins

Perhaps the delegates from the Department of the Environment, Heritage and Local Government could give some input. Is it the long-term view that there will forever be 60,000 people, or more as the population grows, dependent on the private landlord class, or will social housing provision be increased to allow these people access to permanent, stable local authority housing?

Mr. Dowling

There is a long-term approach and the changes noted in this report indicate the need to put in place long-term approaches for the group to which the Deputy referred. Of the 60,000 people mentioned, around 30,000 have been in receipt of supplements in excess of 18 months which may be indicative of a long-term need. The plan is to deal conclusively with that grouping of 30,000 primarily through the rental accommodation scheme. As I indicated, among those are people who would benefit from social housing or other responses. For example, if they were in the higher income group or if their employment situation improved, it is hoped they would be able to access affordable housing or provide for their accommodation needs. We must recognise that the private rented sector is a valid form of accommodation provision. Many people in society choose to meet their accommodation needs by renting rather than through purchase, and that can be in a high quality sphere.

All the work that private residential tenancy support is directed at is achieving those improvements in quality. Much of the accommodation that has come on stream in recent years in the private market is of a much higher quality than previously. We must recognise that there is a choice and that many individuals choose to stay in the rental sector and may often refuse offers of accommodation in social housing.

We recognise that stability and broader issues are of importance. The emphasis in housing policy and in the policy framework the Department launched last December is on building sustainable communities. It is not just about accommodation in a narrow sense. It is about trying to put communities in place based on quality accommodation, and a variety of tenure choice is part of that.

Deputy J. Higgins

I suggest that most people stuck with landlords are in that position because they cannot afford to buy a house or get mortgage approval.

On the rental accommodation scheme, Mr. Hynes said that it is anticipated that of the 30,000 it is envisaged will be put into the hands of the local authorities at the end of 2008, 5,000 will be in this position at the end of 2006. Is Mr. Hynes not being a bit optimistic in assuming that 25,000 can be transferred within a two-year period after that?

Mr. Hynes

That target was set when the rental accommodation scheme was put in place. That is still the target. It has been slower getting off the ground than we would have wished.

Deputy J. Higgins

Are local authorities resisting this? Is it the case that some would not want to have anything to do with it if they had a choice?

Mr. Hynes

There is no evidence that that is the case. There are issues to be addressed by local authorities in making arrangements with landlords. That has taken a bit longer than we would have wished. The scheme is developing momentum as we go along. We still aim to get 30,000 tenancies off the rent supplement scheme and onto the rental accommodation scheme by the end of 2008.

Deputy J. Higgins

Is Mr. Hynes optimistic that 30,000 landlords will sign up for this? That is nearly a third of the total complement signed up with the Private Residential Tenancies Board. Does Mr. Hynes believe one third of landlords will want to sign up for this scheme?

Chairman

Perhaps Mr. Dowling can throw some light on this matter.

Mr. Dowling

The Deputy is right that it is an ambitious target. As Mr. Hynes has said, it stems from the original Government decision which laid out the figures. We would like to have made speedier progress than has been possible. I can confirm that local authorities are fully behind this, as are individual county managers. We have put in place very detailed mechanisms at local level to ensure that there are project managers specifically appointed to drive the rental accommodation scheme in local authorities. Nearly all local authorities are now live on the system and all the ones that have large quotas of individuals are pushing this.

I mentioned earlier that one of the factors which was inhibiting progress was the issue of quality because in entering and securing long-term arrangements with landlords, we want to ensure they are of the right quality. We also want to ensure we get better value for money in terms of the cost of the arrangements in place. This is a medium-term project but we will press ahead and reach the type of figures mentioned.

Deputy J. Higgins

I imagine that there is no possibility that 30,000 families will be in the hands of the local authorities through the rental accommodation scheme at the end of 2008.

Mr. Dowling

I will not legislate for failure. We said we will press ahead with this project and that is what we will do.

Deputy J. Higgins

What is the duration of the period of the agreement with the landlords? Can the agreement be for a minimum period?

Mr. Dowling

No, we have been pushing to achieve longer term arrangements. With the buoyancy of the economy generally most landlords are prepared to have shorter term arrangements. The Deputy can understand the reason for that. Our ambition is to secure the longest term arrangements we can but they are few and far between because, as in other areas, economic forces are driving this market.

Chairman

I will take a final question from Deputy Joe Higgins.

Deputy J. Higgins

If something dramatic happens in the market such that landlords suddenly want to offload their houses, the position could be unstable and uncertain for the families concerned. I will include another one or two questions as this is the final set of questions. The idea is to build up a stock of private rented accommodation in housing estates. Does the Department set a limit or a percentage of houses for this purpose in particular housing estates given that the position is unstable? I agree that local authority tenancies would be more long term than rental arrangements the average term of which is nine months. If the Department had a high percentage of houses in a housing estate under this scheme, it would not make for a stable community that can develop in a stable way. Has the Department limits in that respect and has it considered those issues?

Mr. Dowling

We have. That is an important question because under the sustainable communities agenda we are very much concerned with this mix and it arises in a number of ways. In the case of the more traditional social estate, through the combination of tenant purchase and now smaller estates, we are trying to avoid the difficulties that would have arisen in the past where there was a large concentration of a single tenure type. As the Deputy indicated the same issue can arise whether it be through the rental accommodation scheme, RAS, or a large concentration of recipients of rent supplement. We have worked in particular cases with the Department of Social and Family Affairs to ensure that there is not an over-concentration of cases. Ballymun is one case in point. Deputy Ardagh referred to Fatima Mansions where there is a significant State investment in social housing. We do not want the private component of such housing to be overtaken by recipients of rent supplement or participants in the rental accommodation scheme. The Deputy can take it that it is very much on our agenda to avoid this difficulty.

Deputy Boyle

I address my first question to Mr. Mooney from the Department of Finance. The Department recently undertook an analysis of tax reliefs for property developments in respect of section 23 funding for apartment developments in specified zones. The Department of Social and Family Affairs quoted statistics in recent years that upwards of 40% of the private residential market is paid for through the supplementary rent allowance. Has any analysis be carried out as to the degree of such dependency in terms of apartments built by way of section 23 funding? Is it fair to assume that given that they are new apartments that the ratio in this respect might be even higher than 40%?

Mr. Mooney

I cannot answer that question because I work on the spending side rather than the tax side of the Department. I can ask my colleagues on the tax side if there is any such information based on the review of tax reliefs to which the Deputy referred and, if there is, we could supply it to the committee at a later point. Therefore, I am not in a position to say whether it is——

Deputy Boyle

While I am aware the review did not look at the third area, it is fair to say developers in this country received a treble relief from the State — a first relief on money invested to create these apartments, a second relief on the rent received from the apartments and a third relief in a direct payment from the State of at least 40% in rents received because of the people for whom the State was paying — and nobody seems to know that final figure.

Mr. Mooney

While I do not know the details of the review to which Deputy Boyle referred, I have no reason to doubt that the figures he quoted are correct but I cannot comment on them because it is not within my sphere. If the committee wishes, I can have it checked and come back to the committee if there is anything we can add to that.

Deputy Boyle

I look forward to getting that information. May I ask a similar question of the Private Residential Tenancies Board? Does the board have any knowledge of the proportion of section 23 apartments that are still not registered with it? What action is the board taking to ensure that people who received substantial State support, in terms of tax forgone and direct payment from the State through the rent supplement scheme, are complying with the legislation under which the board operates?

Ms Taheny-Moore

We would not know whether a property came under section 23.

Deputy Boyle

Is the board required to ask for that information?

Ms Taheny-Moore

We are not required.

Deputy Boyle

Has it occurred to anyone in any Department, such as the Department of the Environment, Heritage and Local Government, the Department of Social and Family Affairs or the Department of Finance, that this information should be sought and gathered? I would have thought it was fairly necessary information in terms of policy implementation. The State has given people substantial benefits and it is not accounting for how that money is being spent.

Ms Taheny-Moore

We share information with Revenue. We provide Revenue with information in relation to the registration of tenancies but the Board does not ask them about Section 23. The Revenue may inquire about landlords and we provide details of whether a tenancy is registered, the name of the landlord and whatever, but we have not been asking for that information.

Deputy Boyle

Given the statistics the Department of the Environment, Heritage and Local Government would have on the country's housing stock, there is general information on the proportion of private housing stock and of social housing stock. There does not seem to be such information on the proportion of private rented property provided through direct private investment and through State-supported investment. I find that a strange anomaly.

Ms Taheny-Moore

We have not been collecting that information. We just register tenancies and get details on rent, size of apartments and such like, but we provide Revenue with information if they wish to check up on a matter.

Mr. Hynes

I would add that the Department gives Revenue information on rent supplement payments to landlords on an annual basis as a way of ensuring that the information is available to Revenue for whatever action they might want to pursue.

Deputy Boyle

Is it not also the case that a substantial number of landlords in receipt of supplementary rent allowance are not registered with the Private Residential Tenancies Board?

Deputy Ardagh

Is the PPS number of the landlord given to the board at the same time?

Mr. Hynes

Yes. In all cases we would use PPS numbers.

Ms Taheny-Moore

We have to provide some information. The Department of Social and Family Affairs has compiled some comparative data on landlords who are not registered and it provided us with information on a first batch of approximately 23,000 who were not registered. We are going through that information and we are writing to those landlords who are not registered. We have started that process.

Deputy Boyle

The deficiency is obviously in the legislation applicable to a number of bodies on the statistics they are meant to collect and how public money is accounted for. It is up to the committee to decide what recommendations we can make in that area.

I do not expect there to be information on the third area into which I wish to inquire but I will ask about it anyway. The alternative to supplementary rent allowance is the type of system of housing benefit that exists in other jurisdictions which involves a direct payment to those with a housing need whereby the person with the housing need either enters into private negotiations with private landlords or uses the same support as part of his or her mortgage repayment. What analysis has been done by the Department of Social and Family Affairs or the Department of the Environment, Heritage and Local Government of this method as it operates in other countries with regard to providing a different and more cost effective way of providing housing support?

Mr. Hynes

I have to take refuge in the fact that the question relates to a policy issue which——

Deputy Boyle

It relates to a policy alternative. I am not asking whether it should happen, but whether work has been done on it and whether the method has been seen to work elsewhere.

Mr. Dowling

The decision taken at Government level on the rental accommodation scheme followed from a series of studies that examined other approaches, including the one mentioned by Deputy Boyle. The conclusion was that where there is a role for payments in terms of a short-term response but in terms of the longer term it was better to seek an accommodation based approach. That is what is in mind with the rental accommodation scheme and the other range of social and affordable housing measures we have mentioned.

The rental accommodation scheme has been recognised as part of the draft partnership agreement Towards 2016. The social partners have recognised its role alongside the other supply mechanisms and I understand they have welcomed it, as has Threshold and other groups.

Deputy Boyle

I recall 10,000 social housing units were promised in the previous partnership agreement also, but there has been no sign of them. However, that is a policy decision.

With regard to the method of payment of the supplementary rent allowance scheme, it takes people with a housing need out of the equation and makes them the ultimate victims of house price and rental inflation. It is this issue we need to debate. The value for money report shows that as long as we use this mechanism, it becomes self-perpetuating and the cost to the State continues to escalate. Is that a fair assumption?

Mr. O’Raghallaigh

The rental accommodation scheme addresses that very issue. The people who have a housing need will get housing as a result, although that housing may be under a different form. It may be traditional social housing or housing under contract with a landlord. They will get housing rather than a payment, which addresses the issue.

Deputy Boyle

It appears I will have to wait for further responses to many of my questions.

Chairman

Will Mr. Mooney speak with his colleagues on the Revenue side and provide the information requested, if possible, by way of correspondence with the committee?

Mr. Mooney

I will be happy to do that.

Deputy Ardagh

I wish to confirm the allowance of interest for tax purposes. Does a property need to be registered for the 2005 tax year allowance or does registration start from 1 January 2006? In the most recent budget there was a provision that unless a property was registered with the PRTB, interest would not be allowed on borrowings for it. Does this apply to the 2005 tax year or from 1 January 2006?

Ms Taheny-Moore

I am not certain, but based on the demand for confirmation of registration, it is possible that it applies to the 2005 tax year. I will check that.

Deputy Ardagh

It would be interesting to find out because there might be a substantial increase if it applies to 2005, more than already.

Ms Taheny-Moore

Judging from the increase in applications, it is possible it applies to the 2005 tax year.

Deputy Ardagh

I wish to return to the issue of the poverty trap and rent supplement. Yesterday, a woman who co-ordinates a community trust dealing with people who come out of prison who are trying to give up addictions came to my clinic. Since June, three persons in the community trust who were on a community employment scheme have had their cases reviewed and have lost part of their rent allowance, which was €904. The supplement has been reduced on review by more than €100 a week. This has resulted in three people effectively coming off the community employment scheme because when child care and travel expenses are taken into account, it is not worth their while to be involved in the community employment scheme. They are now back with the full €904 rent supplement. These are vulnerable people who have no social outlet and whose chances of further education, help, encouragement and assistance have gone. I refer to another case in which the child of a single parent reached 18 and the single parent allowance was discontinued. I know of other people who will not go to work because of the effect this would have on the rent supplement. What is the pound-for-pound effect on rent supplement and earnings? Has there been a particular crackdown in the past couple of months?

Mr. O’Raghallaigh

To my knowledge there has been no crackdown in the past couple of months. On the question of the pound-for-pound withdrawal, it was the case until 2000 that if a person earned any amount of money, this was deducted from the amount of rent supplement payable. It was a straightforward pound-for-pound withdrawal. Since 2000, the Department has introduced a number of income disregards. The current position is that a person will be €75 per week better off if they take up part-time employment or community employment.

Deputy Ardagh

Is that after child care expenses, travel expenses and all the other expenses?

Mr. O’Raghallaigh

Travel expenses will be discounted but not child care expenses. In the case to which Deputy Ardagh referred I noted the rent supplement was not withdrawn in full but rather reduced to a level of approximately €400 or €500 per month. A person in that situation is €75 a week better off.

Deputy Ardagh

Will Mr. O'Raghallaigh tell me where one can get child care for €75 a week?

Mr. O’Raghallaigh

No, I cannot. However, it is the case that not everybody needs to pay for child care. Rather than getting into that kind of debate, the Department is very conscious that we need to provide an incentive for people to move off welfare and into work so that they can pick up whatever opportunities are available to them. The Department will be working to improve that €75 in future budgets, as best it can.

Chairman

Is the income supplement reduced if the rent supplement increases?

Mr. O’Raghallaigh

No. This is one of the changes which the Department has introduced since 2000. Family income supplement is not taken into account in the assessment of rent supplement.

Chairman

Is everybody around the country aware of this?

Mr. O’Raghallaigh

They are certainly aware of it. However, it is a two-edged sword because if one's income from employment goes up, the amount of family income supplement to which one is entitled, goes down. The increase in one's employment income is taken into account in rent supplement but the reduction in one's family income supplement is not. This causes a poverty trap in its operation. The Department will be keeping these matters under review to try to smooth the path for people going from welfare to work.

Deputy Ardagh

On the question of community welfare officers and how they interact with their clients, it is very difficult with one person setting out policy and the other administering it. One can blame the other. The community welfare officer approves the granting of a rent supplement. The question was asked at a recent meeting which I attended as to the ongoing role of the community welfare officer with clients who are in receipt of rent supplement and whether ongoing visits take place. These are vulnerable people in general, many of whom are addicts. The HSE and the community welfare officers are both involved with them. Is there any ongoing care for vulnerable people who are on rent supplement?

Mr. Quilty

There are two angles to it. One would be the actual control of the payment and ensuring the person firstly gets what he or she is entitled to and secondly remains entitled to it by virtue of living where he or she does and by having no extra income, etc. However, another important part of the equation is the link the community welfare officer has with other people in the Health Service Executive, for example addiction counsellors, outreach workers and our colleagues in the Department of Social and Family Affairs in terms of identifying whether a person becomes suitable for back to work etc. So there would be ongoing contact. The nature of the contact would vary depending on the people, the difficulties they might have at any given time and their stability. We try to balance out the control aspect of it and the care we need to take in spending public funds. We also try to put the people in contact and navigate through the system for them if they are particularly vulnerable and not able to do it for themselves.

Deputy Ardagh

Earlier we discussed the marketplace and cash. Many tenants on rent supplement find it difficult to get rental accommodation for a variety of reasons. They might not present themselves in a way that leads a landlord to believe they might be the best tenants or they might have difficulty in getting the first month's rent deposit. They are terribly vulnerable. To a large extent they end up in accommodation that is not of the order that one would like to see. What role does the community welfare officer have in monitoring the condition of the accommodation that the person in receipt of rent supplement gets?

Mr. Quilty

We share the Deputy's concern about people being in substandard accommodation. We are not in a position to make a legal judgment as to what is substandard or otherwise. Where we think there are basic difficulties, we can refer those premises to the local authority for a judgment as to their suitability. However, we must also take account of the person that is in there. We work with a carrot and stick. We go to visit the landlord and outline our belief that the accommodation is substandard and needs A, B and C to correct it. We would encourage and support the recipient to try to find other accommodation that is more suitable. At the end if no co-operation is forthcoming from the landlord we would report him or her to the local authority and put the client concerned in touch with someone like a resettlement worker who might be able to navigate and advocate on the client's behalf to get him or her suitable accommodation.

Deputy Ardagh

Is it the CWO who does that?

Mr. Quilty

It might be the CWO or as happens in the homeless units on a preventative basis we have resettlement workers, with whom the CWO links. Either of the two could do it. Where we have resettlement workers as part of the homeless multidisciplinary teams, as we have in Limerick for instance, they would have their finger on the pulse of exactly that accommodation is available at any given stage or likely to become available. Within hours they would know who had left a place and whether a vacancy existed. We would use that vehicle to try to get accommodation more suited to the needs of the person concerned.

Deputy Deasy

I have a question for Mr. Dowling regarding the comments of the Comptroller and Auditor General about economy in the management of the rent supplement scheme by the Department of Social and Family Affairs. He observed that the Department did not maintain information in a form that could be used to identify the factors giving rise to increased expenditure in the period from 2000 to 2005. Essentially the Department did not track why the rent supplement scheme ended up costing in excess of €440 million per year, which is the present level. Mr. Dowling said there was some deliberation about why it should change from the rent supplement scheme to the rental accommodation scheme. What has the Department done regarding ongoing analysis of the rental accommodation scheme that would be different from the rent supplement scheme? Will we find ourselves in circumstances five years from now with a bill which is similar to the current one? What is being done differently with the information by the Department of the Environment, Heritage and Local Government which the Comptroller and Auditor General said the Department of Social and Family Affairs did not do

Mr. Dowling

I understand the Deputy's point. The genesis of the matter as noted in the Comptroller and Auditor General's report was that the collaboration between the Departments in putting the rental accommodation scheme in place set the tone for the future. The individuals with whom we are dealing come in contact with local authorities or community welfare officers in the social and family affairs system and it is important that those arms of the State are in contact to ensure solutions appropriate to people's needs are put in place. We should not forget that it is individual families and households whose needs we are seeking to address. It is also important at central Government level to ensure there is contact between the Department of the Environment, Heritage and Local Government and the Department of Social and Family Affairs to enable us to respond to needs.

Deputy Deasy

What has changed? Is there another system in place?

Mr. Dowling

There is now a series of structures from the highest level, which involves a six-monthly report to Government setting out progress under various headings, down to local level, where there is a requirement for direct contact between community welfare officers and local authorities to ensure assessments of needs are carried out jointly in contrast to the past approach. It is therefore possible to ensure genuine, long-term approaches are devised to provide rented accommodation or social housing. We have learned from the work under discussion.

Deputy Deasy

Mr. Dowling has answered the question. We have been at this for two hours and he has said, in essence, that in some cases appropriate communication did not exist. Mr. Dowling has said that the correct level of communication between the Departments at grassroots level and above did not exist. He has been very clear.

Mr. Dowling

No, Deputy. I hope we can always improve, which is what we are trying to do in a very complex area involving individual needs. We are trying to put in place the appropriate responses to such needs. While we are discussing accommodation at the moment, there is clearly a range of other responses which may be relevant in the areas of health and education provision. We must take all factors into account in formulating our responses. While none of this is new, I hope the approach has improved based on better handling of interdepartmental issues.

Deputy Deasy

I agree with Mr. Hynes that this is the approach to take and that shifting responsibility to local authorities is sensible. How will assessment of information and analysis to determine the extent to which the system has improved occur? Is there a system in place?

Mr. Dowling

Yes. The structures we have put in place include a programme manager for each local authority area who reports directly to the Department. This is a new scheme which means we learn as we progress and implement it. There are dedicated individuals who are required to report back centrally on their activities. In turn, we hold meetings to ensure the experience of those managers is shared nationally.

Deputy Deasy

I must draw attention to the state of the community welfare office in Dungarvan in my constituency. I have correspondence on the matter stretching back to 2001 which I wish to share with Ms Lacey who may not be aware of the matter. I received a letter dated January 2001 from the then regional manager of the South Eastern Health Board in which he acknowledged that despite some repairs the accommodation at the office was in poor condition and not of an acceptable standard. He said that proposals to upgrade the facilities in Dungarvan were at an advanced stage, but four and half years have passed and nothing has been done. The office is still in the same state of disrepair. The regional manager has tried to relocate. I would appreciate it if the Department could reconsider this because it should see the bad state of this place.

Ms Bernadette Lacey

It is a matter for the Health Service Executive.

Deputy Deasy

I was not sure who was responsible. The Department should investigate the state of this office. Questions have been asked about it in the Dáil over the past four or five years. I understand and appreciate that some efforts have been made to find a different location but it is an issue of some urgency.

Mr. Quilty

We will undertake to examine the matter and report back on it. We have no wish to see people in sub-standard accommodation because apart from vulnerable people having to go into such situations, the community welfare officer must go in there too and does not enjoy it any more than the client. I have pointed out similar circumstances to my colleagues in the Department and there has been no problem providing funding to deal with them.

Deputy Deasy

I thank Mr. Quilty.

Chairman

: Will the rental accommodation scheme completely replace the rent supplement scheme?

Mr. Hynes

It will replace it for people who are on rent supplement for more than 18 months. There are over 60,000 people on rent supplement. Over half of those people would move to the rental accommodation scheme. The supplementary welfare allowance scheme will continue to deal with people below that time limit.

Chairman

: Are all local authorities involved?

Mr. Hynes

Practically all are.

Mr. Dowling

The bulk of them are. A few have yet to come into the scheme.

Chairman

: Is it a condition of both schemes that the property would be registered with the PRTB?

Mr. Dowling

Yes.

Mr. O’Raghallaigh

It is not a condition of the rent supplement scheme but there is a chicken and egg situation in that what is registered with the board is a tenancy but the tenancy in many instances cannot be created until the rent supplement is in payment. The tenancy does not exist to be registered at the time the application for rent supplement is made.

Chairman

The rental property is not registered, just the tenancy in that property. Consequently, the Department of Social and Family Affairs cannot make that a condition. How does that differ from the Department of the Environment, Heritage and Local Government making it a condition?

Mr. Dowling

If there is an arrangement between the landlord and the local authority that is within our system we are aware of it. The question of who is the individual tenant is a different matter. They are slightly different systems. The one Mr. O'Raghallaigh described is based on an individual recipient who makes an arrangement with a landlord whereas our starting point is to ensure a supply of accommodation which is given to the individual. Once it is within our system we are aware of the accommodation and whether it is available to us.

Deputy Ardagh

Mr. Dowling mentioned that quality is an issue in respect of the rental accommodation scheme. I understand that several properties which landlords have offered to local authorities are unacceptable to the project managers in the local authorities because either the furnishing or the surrounding amenity is not up to the desired standard. If local authorities are to take over 30,000 of these units for the rental accommodation scheme what will that leave for the people on rent supplement? What examination will those who are responsible for rent supplement clients carry out if local authorities are rejecting so many properties? I do not know whether Mr. Hynes is responsible for this area. Perhaps he has some ray of hope for me. I am thinking about all the vulnerable tenants who will be left with the grot.

Mr. Hynes

Obviously, the quality of accommodation is an important issue. It is coming up as an issue in the context of implementing the rental accommodation scheme, RAS. In that regard local authorities will be listing accommodation they do not regard as meeting the standards of RAS. We should be reluctant to approve such an application for a rent supplement applicant. Between all of us, hopefully we will reach a situation where problems of that nature can be addressed. Landlords will be required to bring their accommodation up to a certain standard if they wish to qualify for the RAS.

Mr. Dowling

That is very much what we envisage. Over time it is hoped we can persuade people to raise their game in terms of the quality of accommodation they provide. It is hoped that high quality accommodation will become the norm rather than a residual factor, which is what I believe the Deputy is referring to. However, it is not all of this nature and a significant number of transfers have come from the voluntary and co-operative housing sector, which is very good quality accommodation. That is a benchmark for the type of quality we should expect to be the norm.

Deputy J. Higgins

I have a few questions for the directors of the Private Residential Tenancies Board, PRTB, before we leave. I believe the assistant director indicated that in the future a great many more complaints are anticipated as people become aware that this is a facility they may use, in cases where tenancies are causing major problems for neighbours. Unfortunately, I did not check the legislation prior to this meeting, but I understand a tribunal can be set up which could declare that a tenancy should finish and the landlord is therefore obliged to conform. How many times has this happened since the PRTB was formed and how effective has it been as a mechanism for resolving problems of neighbours?

Ms Ward

To date, some 46 cases of anti-social behaviour have been taken to us. Not all of these would have been identified as technically involving anti-social behaviour. In some cases they might have amounted to so-called cultural differences and that has to be recognised. However, there have been two very successful cases as regards what might be styled serious anti-social behaviour. The tribunals found in both cases that the landlord was to terminate the tenancies. In two of the cases those tenancies have been terminated by the landlord. In other cases, as part of the tribunal's determination, we would write to the landlord directing him or her to write directly to the tenant outlining precisely the anti-social behaviour involved in the tenancy — clearly stipulating to the tenant that should this behaviour continue the tenancy must be terminated.

In some cases where it is extremely serious and where the tribunal has found the tenancy must cease, this has happened. In other cases it might have found that the tenants needed a severe warning as regards what could happen. Tribunals will be mindful of the necessity of not necessarily terminating a tenancy easily, depending on the circumstances. For serious anti-social behaviour, however, it has happened. We would be successful in that.

Deputy Ardagh referred to a possible deluge in this regard. We should be aware that while a tribunal will determine, people have a right to appeal that determination. However, we have not experienced this with regard to serious anti-social behaviour.

Deputy J. Higgins

Ms Ward alluded earlier to complaints to the PRTB where the landlord could not be identified. This is an area which needs to be worked on because Ms Ward indicated that the PRTB did not have the resources to trace such a landlord — perhaps I misunderstood this point. It is crucial that this situation is examined and resolved because that would essentially mean that landlords who are in breach of their registration obligations are precisely the ones who would escape the net of a possible tribunal and a corrective for the complainant. A method will have to be found whereby such landlords are traced and the hammer is put on them.

Ms Ward

To clarify, I was referring to the number of cases. To date, two cases have come before me in which a residents' association was trying to trace a landlord. In those two cases, the only action we did not take was to carry out Land Registry searches. However, we contacted the Garda and made every effort. In the two cases, the residents' associations decided to try their own way of tracing the landlord. We told the associations that if they were successful, they should come back to us and we would take a case.

The numbers with regard to this issue do not justify it becoming a priority for us. However, if the Deputy's predictions are correct and the issue becomes a reality, it will be a matter for the board to consider how to deal with it.

Chairman

I have a question for Mr. Dowling. I understand that when the pilot scheme for the rental accommodation scheme was introduced, the guidelines suggested that if a tenant participated, that would be deemed as fulfilling his or her housing need. What is the current thinking on this and how has it worked out?

Mr. Dowling

The broad view is that one must make a proper assessment of the person's need. This is a voluntary arrangement, so the person opts to participate in the rental accommodation scheme and does so based on being clear on the kind of accommodation he or she is getting in terms of its quality and whether it meets his or her needs. It is open to the person to determine whether the need is being satisfied through the rental accommodation scheme, whatever accommodation is provided, or, alternatively, whether another response is sought, such as social housing or otherwise.

Chairman

Such people are in a weak position. They have no accommodation. They pay rent to a landlord and get rent supplement on that amount. The local authority then takes over and they get adapted into the rental accommodation scheme. My question is whether this means they come off the housing list.

Mr. Dowling

They may well do so. The Chairman makes an important point that such persons are often in a delicate position and vulnerabilities may exist. It is important that the issue be handled sensitively, particularly by the local authority, to ensure such people are satisfied with the accommodation being provided. Nothing will be imposed on them, no more than it would be in a situation where they are offered a social house. There is the opportunity to refuse that if they do not feel it meets their needs.

There should be a meeting of minds as to whether the accommodation sought disposes conclusively of a person's needs or whether it is more in the nature of an interim measure. In terms of supplying and addressing what has been seen as a long-term need, we aim to deal with that conclusively by means of a rental accommodation scheme. In some cases, it is simply a case of the person remaining in situ in a place where he or she is happy. Many people are happy with the accommodation provided by their landlord and do not wish to find themselves moved somewhere else. If the landlord is persuaded to move across, this may be the best solution for them. Other people may wish to move out of this accommodation. In such cases, the local authority will seek to organise something for them.

Chairman

There are a number of examples and cases where a local authority will not consider people for social housing. For example, if someone gets a tenancy and moves out, sometimes because of anti-social behaviour in the area, most local authorities will not reconsider him or her as applicants for a social house in another part of the local authority functional area. I understand that this is also true in respect of people who participate in the rental accommodation scheme. They are off the housing list and applications from them are no longer considered for social or local authority housing.

Mr. Dowling

In this situation, they would not be off the social housing list but it is something which we must keep before us. We are working on guidelines in respect of it. Ultimately, it comes around to the assessment of need and there will be variations in practice between authorities and individuals as to how they are dealt with. We are working on updating the approach to the assessment of need to ensure that people in the type of situations referred to by the Chairman do not fall between the cracks.

Chairman

There is a certain lack of clarity in respect of this issue. I do not mean this in a pejorative sense but I do not know whether it is because the Department is somewhat removed from the issue. What happens in practice is that someone does not have a house. He or she cannot obtain a local authority house because no local authority houses are available so he or she is very pleased to receive a rent supplement to allow him or her to rent private accommodation. This then moves on to the local authority and the rent supplement is converted into the rental accommodation scheme.

However, the guidelines state that once the local authority has fixed someone up in private accommodation under the rental accommodation scheme, it can consider this as satisfying that person's housing need. Once the local authority considers that it has satisfied the person's housing need, that person's family is no longer eligible for consideration for local authority housing, or social housing, as Mr. Dowling described it. The question of whether this is simply the practice in certain local authorities is contained in the guidelines or is the policy must be clarified because this is what is happening on the ground.

Mr. Dowling

We would be, and seek to remain, in contact with what is happening at ground level in respect of this issue. People's situations may change and people may wish to move from the initial accommodation to which they signed up and which they were happy with as part of the rental accommodation scheme. As in the normal case, it is possible to transfer from rental accommodation into social housing if that is what the individual still seeks.

We must start from the basis that somebody has a need and has opted to be dealt with through the rental accommodation scheme. In this case, as the Chairman intimated, the person simply stays in the accommodation he or she had resided in from the outset and has the option to state whether this accommodation still meets his or her needs. We would regard it as a positive result if that accommodation is of the quality required and meets the need indicated to us by the person. This does not mean that from then on, the person can never obtain recourse to some other response.

Chairman

That may be the theory but it is not what has been happening. Mr. Dowling has spoken about options but someone with no house does not have any options. If he or she is offered private accommodation with the rent supplement or as part of the rental accommodation scheme, he or she has no option but to accept it. When this is done, the option of a local authority house is, in practice, being removed. I want the Department to be aware of this matter and to contact local authorities to ensure that the option of re-entering the housing list and being eligible for social housing in the area is maintained.

Mr. Dowling

Fine.

Chairman

People cannot re-enter the list if their participation in the rental accommodation scheme is deemed by local authorities as satisfying their housing needs. They are no longer eligible applicants. That is the way it works.

Mr. Dowling

We will take the Chairman's comments into account.

Deputy J. Higgins

I want to back-up the Chairman's point. This is a relatively new scheme and only 5,000 people may have transferred to date, but if the result would be the removal of 30,000 eligible persons from the local authority housing list, it would be an appalling vista. The matter must be clarified. When cynically examined, it could be seen as a way of massaging the local authority housing need figures on a national basis. When examined in a human context, it means that a family is dependent on private landlords forever, albeit under the local authority rental accommodation scheme.

Mr. Dowling stated that while the Department is trying to get landlords to sign up for lengthy periods, it has not succeeded in most cases. Perhaps this situation will continue. A family's members could face the vista of being forced to move ten times during their lives if their future is entirely within the rental accommodation scheme. That would be appalling and the issue must be definitively clarified.

Deputy Ardagh

Regarding the RAS, must the tenancy be registered with the PRTB? If there is a problem, does the local authority wash its hands of the responsibility in the belief that it is a matter for the landlord, tenant and PRTB?

Mr. Dowling

An important point underpins Deputy Joe Higgins's question, namely, there might be a danger of the rental accommodation scheme being seen as an inferior system of supply. Under no circumstances would we be prepared to countenance that.

Deputy J. Higgins

While not relating to quality, if it is not permanent, the actual——

Mr. Dowling

Under Towards 2016, the social partners recognised the scheme as being an appropriate response to housing need. The Deputy underlined the challenge in ensuring sufficient long-term arrangements. The voluntary and co-operative housing sector provides high-quality rental accommodation and has never been seen as a step down from social housing provided by local authorities.

Deputy J. Higgins

I am sorry, but we need clarity in this issue. Mr. Dowling is comparing two matters that cannot be compared, as he well knows. The voluntary sector provision is for permanent tenancies, but the local authorities are incapable of guaranteeing permanency under the rental accommodation scheme because landlords can withdraw from it.

Mr. Dowling

There is a variety of approaches. While the voluntary sector has provided one means, private landlords, corporate entities and others can enter their supply in the rental accommodation scheme.

We are at the early stage of delivery and I expect to see a greater reliance on long-term arrangements. This matter is buttressed by the application of the Residential Tenancies Act 2004 to the tenancies in question. All of the protections generally available to tenants will also be available to individuals in this situation.

Deputy Ardagh

Have local authorities washed their hands of responsibility for problems relating to tenancies?

Mr. Dowling

No, local authorities are involved insofar as they secure a supply of high-quality accommodation. It is right that a level of personal responsibility exists between a tenant and a local authority as it does between a tenant and landlord. No one would suggest responsibility does not lie with both the supplier and recipient of accommodation. We spoke about anti-social behaviour previously. The majority of tenants and suppliers of accommodation enjoy a beneficial relationship, which is what should be the norm and not the exception.

Deputy Ardagh

Ms Ward stated residents' associations assisted in identifying non-registered landlords. Can residents' associations make complaints about tenancies?

Ms Ward

They can make complaints on behalf of members who are directly affected, such as if they live next door or across the road or if a general problem exists. We already took a case from a residents' association where a landlord did not fulfil obligations on the standard of maintenance of a property in an estate.

Mr. Purcell

I will address some of the points made. I will return to one of the main points I made in my opening remarks on the ability of the Department to control the rental market or at least have input through the use of rent limits. On the basis of the www.daft.ie index published from time to time, rents reduced nationwide by 8.5% between April 2002 and April 2006. That index is based on a substantial amount of data on the private rental sector.

I do not suggest, and I agree with the Accounting Officer's statement that the Department cannot react to every blip in the market. That would be unreasonable and would not be an appropriate way to address the matter. But if a significant reduction occurs each year in a four-year period then the matter should be reviewed on an annual basis. The way in which the scheme has developed means the Department has become a major player in the private rental sector.

In my opening remarks, I also stated claims for rent supplement are subject to a high level of review. It is good to report that but inconsistencies between districts occurred. I emphasise the importance of a risk-based approach. Little has been done to establish in relative terms the risk involved in the rental supplement scheme. Anecdotally, it can be seen to be high. In the UK, which has similar housing benefit schemes, it is regarded as extremely high-risk.

I recommend that high-risk areas are identified early. Case studies show one instance of fraud which continued for four years and may have cost €85,000 and another which may have cost €35,000. They are not necessarily typical, but they are illustrative of the importance of identifying risk early and imposing controls.

I acknowledge there is a real difficulty in prosecuting the cohort of people who generally avail of rent supplement. As many committee members have said, they are, generally speaking, the most vulnerable in our society and in that context, it is very hard to draw blood from a stone. However, where there is serious fraud, there must be a deterrent, even for that cohort of people who have been in trouble with the law before, involved in drugs and so forth.

The Accounting Officer referred to returns to the Revenue Commissioners. I draw members' attention to a particular section of the report which points out that community welfare officers are not required to establish, during the processing of claims, that landlords are tax compliant or to record their PPS numbers, even where payments are made directly to landlords or their agents. However, as the Accounting Officer has said, once a year the Department provides the Revenue Commissioners with an electronic file listing of all recorded landlords names and addresses and the recorded rents. The position may well have changed with the advent of the PRTB, but at that stage the community welfare officers did not check that landlords were on the register of landlords. In future, it is expected that information about tenancies registered with the PRTB will be available to the community welfare officers to allow them to confirm tenancy details in rent supplement cases.

Both Departments accept the point made about the need to examine the different options for providing accommodation for the less well off. There is no one simple way of addressing this problem. Rather, there is a range of options, including social and affordable housing, rent supplements and the new rental accommodation scheme. It is difficult to determine the cost of the various options to ensure that we get the optimum type of mix which yields the best results from a cost-benefit and value for money point of view. We have referred to and appreciate the difficulties involved in carrying out such work.

However, we recommend that the Department of the Environment, Heritage and Local Government carries out or commissions a further analysis of the relative cost effectiveness of options for the provision of social housing. We also suggest that the results of any such analysis should be published to facilitate public debate on the relative merits of the different social housing options. While such work is difficult, it must be done in light of the sums of money we have been discussing today, namely, €2 billion in terms of social housing, the ongoing financial commitment to rent supplements and the growing commitment under the new rental accommodation scheme.

Chairman

: May we dispose of value for money report No. 53? Agreed. As there is no further business, the committee stands adjourned.

The committee adjourned at 2.50 p.m. until 11.30 a.m. on Thursday, 14 September 2006.