I move that the Bill be now read a Second Time. This Bill makes provision for further issues from the Local Loans Fund in respect of local loans. The existing statutory limit on aggregate issues as fixed by the Local Loans Fund (Amendment) Act, 1954, is £90,000,000. The Bill extends this limit to £110,000,000.
Issues from the fund from the 1st May, 1935—when it was established— up to 31st March, 1956, amounted to almost £76,500,000 of which £62,500,000 was for housing loans, nearly £10,750,000 for sanitary services and public health loans, nearly £1,500,000 for vocational educational loans, over £780,000 for a temporary advance to Dublin Corporation under the Finance (Miscellaneous Provisions) Act, 1945, in connection with redemption of stock, and £1,000,000 for loans for other services.
Over the same period sanctions for loans from the fund—including a carry-over from before 1st May, 1935— came to approximately £88,250,000. The difference between the figure for sanctions and the figure for issues is accounted for by the fact that while loans are normally sanctioned in full they are issued in instalments as required by the borrowing authorities.
Included in the figure of £88,250,000 for loans sanctioned is a sum estimated at £1,000,000, representing loans sanctioned since the establishment of the fund which will not be required because of the abandonment of proposed works or their completion at a lesser cost than originally estimated. The total of commitments at 31st March, 1956, therefore, stood at £87,250,000, or within £3,000,000 of the present limit of £90,000,000, which should be reached before the next session. The additional margin of £20,000,000 provided for in the Bill should suffice to cover commitments for approximately three years.
The extent to which loan finance can be made available through the Local Loans Fund depends on the availability of capital for State financing in general. It was indicated in the Budget statement earlier this year that at present capital is not only scarce but also abnormally dear and that in the ordinary course it would not be possible to meet all our desirable capital requirements in the absence of a marked change in the savings trend. I regret I can as yet see no evidence of a sufficiently marked change in that respect. The fact must, therefore, be faced that the capital funds available, even for the most essential projects, are scarce and are likely to continue to be so in the immediate future.
This situation must inevitably react on the finances of the Local Loans Fund and for the present at least all projects requiring to be financed from the fund must be closely scrutinised. In relation to capital outlay as a whole every effort is being made to preserve a reasonable balance between social and economic considerations but in our current circumstances it is vital to devote far the greater proportion of the available resources to productive investment. Housing is the main claimant on the Local Loans Fund. Requirements under this heading are being accorded a high priority and I hope it may be possible to provide for the continuance of all essential local authority housing.
The fact that the needs of local authorities outside the Dublin and Cork urban areas have been largely satisfied and may be expected to taper off rapidly in the years ahead should afford some relief, but unfortunately, any relief in this way for 1956-57 is more than offset by the necessity to come to the assistance of Dublin and Cork Corporations who have been unable themselves to raise all the capital they need to meet their current requirements. Similar assistance has been promised to Dublin next year, if necessary, but it is to be hoped that the difficulties are only temporary and that in the years ahead both Dublin and Cork Corporations will be able to raise their full requirements of capital independently as heretofore.