asked the Minister for Local Government if he is aware that the effect of certain circulars issued by his Department recently will be either to increase the rents of local authority houses to an unbearable level, or to increase rates beyond the capacity of ratepayers; if he will make a statement on the matter; and whether he favours meeting any deficit arising by greater subvention from his Department or by increase of rents and rates.
Ceisteanna—Questions. Oral Answers. - Rents of Local Authority Houses.
8.
Recent circular letters from my Department have emphasised the importance of ensuring that rent schemes are framed in such a way that no one in need of re-housing is refused it, or should suffer hardship because of inability to pay rent; and that tenants should pay rents related to their family and financial circumstances and the standard of the accommodation provided. The manner of application of these guide-lines is a matter for each housing authority in the first instance.
The maximum subsidy from my Department towards the cost of a new serviced local authority house is at present equivalent to a capital grant of £1,100 or, at the current Local Loans Fund lending rate, to an annual payment of £87 a year for up to 50 years. About 90 per cent of all new local authority houses qualify for this maximum subsidy.
The subsidy paid from the rates by a local authority, in addition to the State subsidy, varies widely depending on the rent scheme adopted by the authority, but in most cases ranges from £40 to £70 a year, with a capital equivalent of from £505 to £881.
I do not agree that rent schemes on the lines indicated would have the effects suggested by the Deputy. The levels of subsidies from State and local sources must be determined with reference to the desirability of securing equity as between tenant, ratepayer and taxpayer. It is only in this way that the maximum number of new houses needed can be financed.
Does the Parliamentary Secretary not agree that the total sum on which we pay subsidy is now £1,650 notwithstanding the fact that houses have been built in the past year which cost as much as £2,600, and more in Dublin? The effect of this circular has been to create a state of affairs which is quite intolerable. Formerly the Central Fund paid subsidy on the full cost of the house and there is a difference now of £950.
I do not think it was ever accepted that the Central Fund should bear the total cost.
Does the Parliamentary Secretary not agree that over the years the Central Fund, did, in fact, bear the total cost?
Not the total cost; it bore two-thirds of the cost.
Two or three years ago the total cost was £1,650 and now it is £2,600.
I agree that the subsidy is based on a cost of £1,650. The Deputy said that heretofore the State bore the full cost. We never did. We paid only a two-third subsidy.
As I am dissatisfied with the Parliamentary Secretary's reply, I wish to raise the matter on the Adjournment.
I will communicate with the Deputy.