asked the Minister for Finance whether, having regard to the fact that high rates of interest impose a tremendous burden on public housing and on other public works carried out by local authorities, he will set up an interdepartmental committee to examine ways and means of obtaining credits for such works at much lower rates of interest.
Ceisteanna—Questions. Oral Answers. - Housing Credits.
15.
The rate of interest on loans from the Local Loans Fund, from which local authorities raise the great bulk of their capital requirements for housing and other purposes, is reviewed from time to time, especially by reference to the terms of issue of National Loans. I am glad to be able to say that as a result of a recent review the interest rate on issues from the Fund on and after 1st January next will be reduced from 6¼% to 6%.
The full cost of the interest charged on their borrowings does not fall on the local authorities. Exchequer subsidies, estimated at over £3 million in the current financial year, are paid in respect of loans for local authority housing and other works. These subsidies cover a substantial part not only of the interest charges but also of the capital repayments.
In the circumstances, I do not consider that the setting up of an interdepartmental committee would serve any useful purpose.