Dáil Éireann debate -
Wednesday, 4 Dec 1963

Vol. 206 No. 5

Private Members' Business. - National Building Agency Limited Bill, 1963—Second Stage.

Minister for Local Government (Mr. Blaney)

I move that the Bill be now read a Second Time.

As Deputies are aware, the National Building Agency was established with the primary object of facilitating the provision of houses and ancillary services required in connection with industrial expansion where the need could not be met appropriately by local authorities or is not otherwise met by private enterprise. Since its establishment the Agency has been financed under temporary arrangements and the main purpose of the present Bill is to put its finances on a more regular and firmer footing.

At present the Building Agency, which is incorporated as a company under the Companies Acts, has a nominal capital of £100. It has been financing the construction of houses for industrial personnel by means of temporary advances obtained from the Industrial Credit Company. Expenditure of the Agency on housing for the Garda Síochána is recouped from the Vote for Public Works and Buildings, the day to day needs being met by temporary bank overdraft accommodation.

When speaking in the House on 8th February, 1961, on the motion that the Agency be scheduled under the State Guarantees Act, I said that consideration might have to be given to making more adequate long term arrangements available for financing its operations. Having regard to the present extent of those operations it is not appropriate that the existing arrangements under which the Agency is financed on a temporary basis by the Industrial Credit Company should be continued and, accordingly, the Bill now before the House makes provision whereby it will be possible to provide finance direct from the Exchequer.

Section 2 of the Bill gives power to the Minister for Finance to take up shares in the Agency subject to a limit of £100,000 for investment in this form and section 6 provides for interest bearing repayable advances from the Central Fund to the Agency to enable it to finance its activities. In its arrangements for providing housing for industrial workers the Agency normally operates on the basis of securing repayment of its expenditure over a period. Accordingly, direct Exchequer assistance to it will normally be by way of repayable advances under section 6. Section 2 is included to provide for increased share capital if financing in that form should be found at any time to be appropriate.

Power for the guarantee by the Minister for Local Government of borrowing is contained in section 7 of the Bill. This power will replace the guarantee power available under the State Guarantees Act, 1954, which is being repealed by section 12. I hope that the Agency will not have to depend entirely on the Exchequer and that borrowing under section 7 to meet needs will be feasible from time to time. I have in mind that from now on the Agency will have available valuable and growing assets in the form of mortgages secured on houses for the construction of which it has advanced moneys. Indeed, I feel that in due course these assets should constitute an acceptable security for the purpose of raising loans even without the backing of a State guarantee.

Section 9 of the Bill provides that the total of amounts advanced from the Central Fund to the Agency and of amounts guaranteed by the Minister for Local Government with the consent of the Minister for Finance may not exceed £2 million at any time. The limit of £2 million is considered adequate to ensure that the Agency will be able to obtain sufficient funds to meet its needs in the sphere of industrial housing and related services for some time ahead. Fresh legislation will, of course, be necessary before the limit can be exceeded.

The provisions of the Bill follow the general lines of corresponding legislation relating to the other comparable State-sponsored bodies such as the Industrial Credit Company and the Shannon Free Airport Development Company. The provisions are of a varied and flexible nature as is considered suitable for a State-sponsored body of this kind. I have now summarised the main provisions of the Bill. The Bill also contains a number of provisions of a technical or routine nature, for example, provisions requiring the furnishing of accounts by the Agency, the accounts to be laid before each House of the Oireachtas.

I think it right that I should end by giving a short summary of the work done by the Agency to date. As I mentioned at the outset, the principal purpose of the establishment of the National Building Agency was to facilitate the provision of housing and ancillary services related to industrial expansion. It has also the function of assisting to the extent required in the provision of housing for State employees whose duties involve a transfer of residence for them. It may, too, assist in the provision of housing for the personnel of State-sponsored bodies. Pursuant to its functions in this respect the Agency—as Deputies already know—is participating in the Garda housing programme. As I indicated to the House in 1961, it is not the intention that the Agency would compete with any existing agencies or persons in the provision of houses generally, but rather that it should step in only in cases where the normal facilities for house building are not, for one reason or another, available.

On the industrial side the Agency has undertaken to provide or assist the provision of some 285 houses for industrial workers at various centres throughout the State. Most of these workers consist of skilled technical and executive personnel whose services are essential for the development of the industries and for whom houses are required locally. The total commitment involved to date is about £686,000. Of the 285 houses, 82 have been completed or substantially completed, while construction work is in progress or contracts have been allocated in respect of a further 66 houses.

The Agency is in a position to give a comprehensive service to industrialists anxious to provide housing accommodation for their workers. In some cases the industrialists concerned arrange the contract and the Agency provides the necessary finance. Recently the tendency has been for industrialists to make use of the full comprehensive services available. This means that the Agency will complete all necessary arrangements including the purchase and development of site, design of houses, placing of contracts and supervision of building operations. The industries which have availed themselves of the comprehensive services include both established companies wishing to expand and new companies setting up in business. These firms find it an advantage to have an organisation which is prepared to relieve them of the trouble involved in providing houses for their workers. They have expressed their appreciation of the services provided by the Agency. It is clear that the Agency is assisting the industrial drive in a significant way. Its success in this sphere suggests the possibility of its being able to assist in other housing operations in the future.

In the sphere of Garda housing, the Agency has on hands the provision of some 530 houses. So far sites are being or have been acquired for about 410 houses, tenders have been invited for the erection of 255 houses and contracts have been entered into for the erection of 219 of them. About 80 are completed. These houses are being provided in widely separated centres throughout the 26 Counties. In many centres only one or two houses are being provided.

I have recently had the opportunity of seeing some of the houses which are being built for the Gardaí. The schemes which I visited were widely dispersed and the works in progress were at the various stages of construction. I was very much impressed with the results achieved both from the point of view of economy in cost, and, what is equally important, high standards of construction and design. It was evident to me that the Agency had given much consideration to these important aspects.

I think that these remarks will give a general picture of the progress and activities of the Agency up to the present. I feel that Deputies will agree that the new financial arrangements proposed in this Bill are justified. Accordingly, I commend this Bill to the House.

Mr. Jones

The object of this Bill is, as the Minister says, to make better provision for aid for industrial housing in the State. The Minister has paid tribute to the Agency for its work in that connection. I have no doubt that industrialists are pleased to avail of the opportunities provided for them.

I have not seen the memorandum and articles of association of the company set up to deal with this matter. I do not know whether they have been laid on the Table of the House or whether they are available to Deputies. If a copy were placed in the Library, Deputies might read it with interest.

I understand from the Minister that he envisaged the Agency being used successfully in the future in regard to housing operations other than industrial housing, in view of its success in the latter field. In reading about a National Building Agency, some people might be inclined to take it that the Agency would tackle the type of housing problem which was debated here recently and which will require the unremitting efforts of responsible persons if there is to be speedy provision of houses for those persons who are waiting to be housed. In the Bill before the House, provision is being made for an entirely different type of situation, namely, industrial housing. The industrialist who needs housing for key-workers will be dependent on this Agency in that respect. That represents a further aid to industry. I am sure that industrialists recognise that a very valuable and additional contribution is being made by this Bill to industrial expansion.

It would be interesting to hear from the Minister where the houses provided by the Agency are located, their number and whether they are centralised in selected areas or are provided in connection with small industries in small centres of population, and the future policy in this respect.

According to the annual report of the Agency, which I have read with interest, there has been a growing demand for the type of activity in which it is engaged. I wonder in regard to it whether the ordinary normal channels were fully availed of, whether there had been an appeal to the various building societies, whether the available limits of capital of various societies were being used, whether any approach had been made to them or whether, in this case, industrialists prefer to leave this problem at this stage to the National Building Agency. I understand that these companies have capital at the present time which is not being fully employed and which is available for the erection of housing of the type carried out by the Agency.

The Minister has mentioned that houses erected through the National Building Agency are constructed expeditiously and at a competitive price. The accounts of the Agency would give the impression that the price per house is somewhere in the region of £2,000. I have made that calculation on the basis of the figures shown in the balance sheet. I would ask the Minister to say if that estimate is correct and, if so, whether it represents the all-in cost, including acquisition of site and all expenses associated therewith, preparation of mortgage and plans and specifications.

The report states that all types of housing have been catered for by the Agency, ranging in variety from a miner's house to a manager's house. I presume the Agency are satisfied that the houses being provided are suitable for ordinary housing needs in the event of their not being required at some future date in connection with an industry.

The provision of housing for the Garda and for State personnel is one of the objects of the Agency. The Minister has had an opportunity to inspect some of the houses provided for this purpose, and has expressed himself as being very impressed by the results achieved, from the point of view of economy in cost and high standard of construction and design. In that respect it would be interesting to know whether these houses are, in the main, scattered in various areas or are concentrated in the larger centres of population, or whether, in the case of the transfer of the Garda Depot to Templemore, the houses are more concentrated than they are elsewhere.

It struck me as peculiar in reading section 7, subsection (6), dealing with the repayment of moneys, that these may be recoverable as a simple contract debt in a court of competent jurisdiction. The company in which the Minister for Finance is the majority shareholder, does not repay to the Central Fund what it owes, that is, presumably, because it cannot do so. I would invite the Minister's comment as to what interpretation is to be placed on that section because surely no court order will make any sum available after that if the company itself is unable to make the repayment.

The provision of housing in the ordinary way is laudable It is agreed on this side of the House that that is necessary at all times and that every encouragement should be given to the better housing of personnel whether it be for those who are waiting to be provided with local authority housing or the type of housing which is envisaged here. The Minister knows already what the priorities are in the provision of finance for housing and I am sure the type of housing which falls to be dealt with by a local authority has a high priority. However, I do not know whether this limit to borrowings which ought to be guaranteed is an absolute limit. I notice the Minister states that the agency should be able to borrow on its own, perhaps, after a time. Naturally, it could not do it in the early stages because its financial pattern would not provide the necessary resources. I would invite the Minister to indicate what he feels would be the limit of advances to the National Building Agency for this purpose and how much would be guaranteed in the long run.

In so far as this measure will increase the number of houses available in any part of the State I welcome it. The one thing I would be concerned about in the aims of the National Building Agency is that it would apply itself to the smaller centres of population where there is a demand for this type of housing and which in the ordinary way has not yet been met. I am aware and I am sure the Minister is aware that some personnel— they may not be solely State personnel —are located in areas where they are finding difficulty in getting houses built for themselves. They are not the responsibility of the local authority in this matter and very often it is difficult for them to obtain the necessary backing from the building agencies which are in existence at the moment because of the locality in which they live. There are others apart from Garda personnel who might fall to be dealt with by the National Building Agency and I would ask the Minister to indicate whether that type of housing would also be dealt with by the National Building Agency in respect of a person who might apply to them for help in the erection of a house in the area.

Mr. Byrne

I would re-echo the sentiments of Deputy Jones. It would be much more desirable if this Bill were catering for the appalling position which exists in this city at the moment in relation to housing. Unfortunately, it is doing nothing on those lines. I have considerable reservations about this Bill which is turning a £100 State company into a £100,000 State company, a Bill which can be said to bring to the forefront many of the considerations which would be discussed in this House on a debate on industrial grants policy. Although the function of this agency, as I see it, is very largely to provide assistance to industrialists in relation to the housing problems of their personnel, I do not propose to discuss industrial grants policy at this stage. However, I should like to inquire of the Minister if he has a close liaison with the Industrial Development Authority in regard to the activities of the National Building Agency.

In regard to the provision of finance for housing for industrialists I want to know what is wrong with the existing facilities which are available to these people for well-secured risks. What is wrong with the building societies? Why should we create yet another State company, a £100,000 State company, which may in time develop into a £2 million State company—for £2 million is the limit to State participation in this company prescribed in Section 9 of the Bill—yet another State monster, very probably.

Will this body be accountable to this House? It is a company registered under the Companies Acts which at no time envisaged or contemplated State companies the shares in which would be entirely held by Ministers of State. Company law includes many provisions for the protection of minority shareholders, many provisions which are inapplicable to State companies. To give a typical example, there was an investigation recently into one State company, Irish Estates Limited, which was held under the Companies Acts at the request of the main shareholder in this company. Company law provides protection for minority interests. In respect of any company owned not by the State but by members of the general public, a 10 per cent minority may requisition an investigation into its affairs provided that 10 per cent minority is acting in good faith. May 10 per cent of the members of this House, representative of 10 per cent of the public, requisition an inquiry into the National Building Agency Limited if at some future date that would seem to be a desirable thing to do? It may not. The Companies Acts as they stand at present are not the proper means for the promotion of State companies. We have not addressed ourselves to the problem of control of these companies. If the Minister for Local Government is questioned some years hence about the activities of this body will he take the attitude which the Minister for Transport and Power takes when queries are raised in this House about CIE or the ESB? I should deplore such an approach.

It is time we recognised the fact we have in this country many State companies which have come into existence on a hit or miss basis, as a result of a trend of events. We have not taken into account in framing national policy what the first principles are to which we should have regard in relation to their administration.

Debate adjourned.