I move that the Bill be now read a Second Time.
This Bill has two purposes, namely, to raise the statutory limit for issues from the Local Loans Fund and to give power to write off from the assets of the Fund the outstanding balances of certain loans which have proved to be irrecoverable.
The present statutory limit on issues from the Local Loans Fund was fixed at £170 million by the Local Loans Fund (Amendment) Act, 1961. The Bill proposes to raise the limit to £250 million.
From the time of its establishment in 1935 up to 31st March, 1964, issues from the Fund amounted to £149 million, by far the greater part of which related to housing. Slum clearance and other re-housing schemes of urban local authorities absorbed £41 million, and the corresponding schemes of rural local authorities took £33 million. This makes a total of £74 million for local authority housing as a whole, or just half of the total issues from the Fund. Almost 114,000 dwellings were provided by the local authorities during the period.
Loans under the Small Dwellings Acquistion Acts and similar legislation up to 31st March last absorbed £35 million, the money being issued to the local authorities for re-lending to persons providing houses for themselves. The balance of the issues for housing—£8 million—related to loans to the local authorities to meet the requirements of their supplementary housing grant schemes, and to loans for housing in the Gaeltacht under the special Gaeltacht housing code.
Thus, issues for the various housing services absorbed £117 million in all. To complete the picture I may mention that Exchequer housing grants in the same period for new houses and the improvement of existing dwellings amounted to £43 million, which gives a grand total of £160 million for housing over the whole period since 1935.
Issues from the Local Loans Fund on services other than housing amounted to £32 million. Of this amount, county homes, hospitals and dispensaries took £6 million. Sanitary and other health services absorbed £20 million, of which a large part was spent on water supply and sewerage schemes. These schemes, of course, arise primarily from needs associated with housing development and so may be regarded as part of the cost of re-housing or improved housing. There is, however, a growing element in these schemes to cater for new industries and for the development of tourism as well as for new schools and hospitals. Loans for the construction and improvement of vocational schools absorbed just under £4 million. Here, too, requirements are growing steadily, reflecting the expansion in our technical education service.
I may add that the global amount of £149 million issued up to the 31st March last included a total over the past decade of £23 million lent to Dublin and Cork Corporations for housing and other purposes.
In addition to the issues actually made, account must also be taken of the substantial outstanding commitments in respect of schemes in progress and planned. On this basis, and bearing in mind that at Budget time requirements for 1964-65 were estimated at £16½ million, the existing statutory limit of £170 million needs to be increased. Some temporary falling off in issues is expected as a result of the building strike.
A sharp increase is, however, anticipated in the years ahead, according as the enlarged programmes envisaged for housing, hospitals, vocational schools, water supplies, sewerage and other services come into full operation. To meet the situation, the Bill proposes to increase the statutory limit for issues from the Fund to £250 million. This should suffice for the next four years or so, after which it would be necessary to seek further authority from the Dáil to continue issues.
A growing level of investment in building and construction is forecast in the Second Programme for Economic Expansion. It is clear that this growth will impose a heavy strain on national resources. As the figures I mentioned earlier indicate, building and construction accounts for virtually all of the issues from the Local Loans Fund, while accounting for about one-third of the public capital programme as a whole.
In this situation it is a matter of serious concern to the Government that building prices should have risen so steeply over the last few years and that they still continue to rise. The impact of these increases is felt throughout the whole community, not only by those trying to provide and maintain homes for themselves and their families but also by the taxpayers and ratepayers who have to meet such a large part of the bill for housing, schools, hospitals and other services.
I would appeal now to all those in a position to help, whether workers or employers, to co-operate in every way towards keeping costs down. Our need for more houses, schools and hospitals is great. It is obvious that the higher costs go, the more difficult it will be to meet that need. Ways should be persistently sought of increasing production and productivity in the building industry. Improvements that will cut costs are vital to the long-term success of the industry and to the fulfilment of the heavy building programmes envisaged. Given our present difficulties in the export field and our balance of payments problem, it is most important, too, that home-produced building materials should be used as far as possible.
The Bill proposes to give power to continue the issue of loans to local authorities, including health authorities, and vocational education committees. As in the past these authorities will be expected to do their best to borrow independently to meet their capital needs before calling on the Local Loans Fund. In making this comment—I made a similar comment when speaking on the previous amending Bill in 1961—I think I should draw attention to the fact that local authorities in neighbouring countries are obliged to rely much more on their own efforts to raise capital than our authorities. Here the Exchequer provided as much as 80 per cent of the loan capital raised by our local authorities in the year 1963-64.
I mentioned at the outset that the Bill also provides power to write off outstanding balances of certain loans which it has proved impossible to recover. These loans were made to farmers over 50 years ago under various last century Land Acts for the improvement or purchase of land or farm property. On the establishment of the Local Loans Fund in 1935, the balances of the loans remaining to be repaid became part of the assets of the Fund. All efforts to recover the amounts now outstanding have failed because of the death, emigration, or poor circumstances of the persons concerned, change of ownership of the land or other reasons. The only practicable course now is to write off the sums involved.
The total amount in question— £272—is insignificant in terms of issues from the Fund. To comply with the requirements of the Local Loans Fund Act, 1935, it will be necessary to provide by supplementary estimate for recoupment to the Fund of principal written off which is just over £223.
I commend the provisions of the Bill to the House.