asked the Minister for Local Government if, in view of the difficulties encountered by building contractors in securing bonds for housing schemes and the problems this also creates for local authorities, he will take steps to remedy the position.
9.
Ceisteanna—Questions. Oral Answers. - Housing Scheme Bonds.
8.
asked the Minister for Local Government if he will introduce legislation to provide that all building contracts entered into will include provision for a bond by the contractor for the proper completion of the work.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 8 and 9 together.
In the case of local authority housing schemes, contractors are generally required to enter into bonds with insurance companies for the due performance of contracts. Difficulties have arisen from time to time in obtaining these bonds. I am having this problem examined in my Department to see what can be done. When this examination, which includes a review of arrangements in other EEC countries, has been completed, I will decide what new measures can be taken.
As regards private housing contracts, it is for the parties immediately concerned to decide whether the contract should include provision for a bond by the contractor for the proper completion of the work.
In view of the difficulties local authorities are encountering, I wonder would the Minister consider it wise to approach the Public Bodies Mutual Insurance Company, or association, or whatever they are, to see if they could provide insurance or bonds for this type of contract?
I will have the Deputy's suggestion considered, but I am sure he is aware that contractors usually know where to go themselves. In some counties there are separate arrangements where a bond is accepted from the contractor himself. The Wexford County Council are one of those. However, in large contracts it is not possible to do this and indeed in Wexford recently two schemes had to be readvertised, one of them because there was a down payment sought from the contractor which he could not meet. I appreciate it is a problem and I will bring the matter to the notice——
Is the Minister aware it is practically impossible for any builder to get a bond. This, in turn, creates the added difficulty in the matter of competition for local authority housing? Would the Minister take into account accepting personal bonds as distinct from the requirement to go to insurance companies for these bonds?
I am not aware that it is practically impossible. There is quite a lot of building going on at the present time. The trouble with personal bonds is that where small contractors are concerned a number of local authorities are prepared to do it but in cases of large contracts it would be impossible to produce the necessary money to give a personal bond.
I do not think we are talking about larger contractors. They seem to be able to get bonds.
Deputy Browne would not seem to agree, as far as his county is concerned. I agree but I said that smaller contractors are having a lot of difficulty.
Would the Minister consider issuing some directive to local authorities to do away with bonds altogether, especially for smaller contracts? He will agree it is desirable to have competition if possible in the tendering for local authority housing.
I would not be prepared to do that. I am aware, as every public representative must be, of contracts which have not been completed by small contractors and somebody has to finish them.
Deputies
Hear, hear.
The Minister must also be aware that we are getting very few tenders for local authority houses because a lot of the small builders cannot get bonds.
One of the reasons why local authority housing is attracting so few tenders is because of the tendency of local authorities to accept the lowest tender which is often so low that the successful tenderer cannot complete the job. If a realistic price were tendered for the job, it might be possible to get a lot more contractors.
Is the Minister suggesting by that that the grants will be increased.
The Deputy can keep hoping.