andMr. J. O'Leary asked the Minister for Local Government if he is aware of the concern expressed by numerous housing authorities about the possibility of large scale unemployment among maintenance staffs arising from the terms of circular letter H4/76 dated 20th February, 1976; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Housing Authorities Maintenance Staffs.
2.
Thirteen of the 115 housing authorities have made representations to my Department regarding the terms of circular letter H4/76 of 20th February, 1976. The issue of that letter must be considered in the light of the trend in current receipts and expenditure on local authority housing in recent years.
Regarding receipts, rents and the net proceeds of sales of local authority houses are never sufficient to meet the costs which the authorities must pay in respect of the houses. The balance of costs—loan charges, maintenance and management expenses—has to be met by subsidy.
Until March, 1973, this subsidy was defrayed in about equal amounts by the Exchequer and the rates. Since 1973, arising from an undertaking in the National Coalition's 14-point plan designed to ease the very onerous burden on ratepayers, the entire cost of these subsidies is being transferred on a phased basis to the Exchequer. In 1972-73, the rates subsidy on local authority housing was £6.74 million; this year it will be only £855,000. On the other hand, the Exchequer subsidy increased from £5.8 million in 1972-73 to £29.35 million during this period.
Following this transfer of liability to the State, I have been concerned to note that some local authorities who had failed for many years to carry out a reasonable programme of maintenance to their houses while a substantial part of the cost had to be borne by the rates, have been undertaking ambitious schemes of repairs and structural improvements, the effect of which would be to make the general body of taxpayers bear the cost of the past neglect by the same authorities. For example, expenditure on maintenance and management rose from £7.12 million in 1972-73 to an estimated £13.7 million in 1975.
In order to control expenditure, while not inhibiting a reasonable programme, I issued circular letters to local authorities on 8th August, 1973, 3rd April, 1974, 13th February, 1975, and 19th September, 1975, warning them of their duty to maintain relativity between the actual expenditure on maintenance and management in 1972-73 and that to be incurred in subsequent years, regard being had to increases in costs.
In this context, I considered it necessary to issue the circular of 20th February, 1976, which stated that the commitment by the Government to take over responsibility for the nett cost of the social housing programme was never intended to be completely open-ended in the area of maintenance and management.
These restrictions on expenditure should not generally cause difficulties for any local authority who, up to now, have adopted a normal programme of management and maintenance expenditure and adhered to the guidelines indicated by the Department in recent years. The limits imposed in the circular of 20th February, 1976, will allow an expenditure of £15.945 million on management and maintenance in 1976, representing an increase of 83 per cent on the expenditure in 1973-74, which is very reasonable in the light of the increase of 47.5 per cent in the consumer price index between May, 1973, and November, 1975, and an increase of 73 per cent in building costs in the same period. Moreover, £15.945 million represents an increase of 17 per cent on the estimated expenditure on maintenance and management in 1975.
The restriction on expenditure on maintenance of local authority dwellings does not, of course, generally prevent local authorities from carrying out necessary works of repair in order to comply with the statutory requirement of putting houses into good structural condition before selling them to the tenants. Pending receipt of statistical information sought in the circular letter, local authorities may proceed on the basis that expenditure in 1976 on such works should not exceed that in 1975. A further circular letter will also be issued by the Department on the financing of improvement works to local authority houses.
In the present economic situation, it is necessary to limit expenditure from public funds as far as practicable. While restrictions have been imposed on the growth of expenditure on the maintenance and management of local authority houses, public capital expenditure on housing has increased from £46 million in 1972-73 to over £122 million. This substantial real increase in capital expenditure is intended primarily for the building of houses for those who need them.
The Minister's reply is more or less what was in the circular but he has not answered the question he was asked. In view of the large number of people unemployed, particularly in the building industry, is he concerned about a reduction in the number employed on maintenance work because of a cut in the finances available?
Of course I am interested in the number of people unemployed but I see no reason why there should be large scale unemployment. I am aware some local authorities did not realise there were houses to be repaired until three years ago and over the last two years some local authorities have doubled, and even trebled, the number of people employed on repairs. It is too bad that they should have left houses in the condition they were in for so long but I am hoping the repairs will continue because, apparently, some people are not aware that they can still continue to repair houses which are being purchased.
Would the Minister agree that at a time when a big number of people are unemployed it is not right to reduce the finances in any labour intensive aspect of industry?
Deputy Faulkner was one of the Members who walked through the division lobby to vote against budget increases on the grounds that Government expenditure was too high. The Deputy wants to have it both ways; he wants to be against increased expenditure and he wants to have more money given out under every heading. The Deputy is aware that this is not possible. An enormous amount of money is being given for maintenance and housing construction by the State this year.
I want proper priorities set at a time of very high unemployment. Would the Minister agree that any reduction in the amount allocated for maintenance allows a deterioration to take place in existing housing stock which cannot be retrieved?
Does the Deputy not know that the reason why so much money has to be spent now on repairs is because his Government, and the local authorities spent practically nothing over a long number of years under this heading? As far as priorities are concerned, is the Deputy suggesting that we should stop building houses and spend all the available money on repairing the bad ones built in the last few years his party were in office?
We must move on to the next question. I have allowed Deputy Faulkner to put three supplementary questions; how many more does he want?
Two Members are involved in this question.
Is Deputy Faulkner insisting on putting more supplementaries and then expecting the Chair to call other Members? We cannot allow a debate to arise at Question Time.
We are trying to elicit information and we cannot get it from the Minister. Irrespective of the number of supplementaries we ask we are as wise at the conclusion of the Minister's reply as we were at the beginning.
The Chair has no control over such matters and the Deputy ought to know that.
Will the Minister inform me what councils have undertaken the ambitious schemes of maintenance he has referred to?
I will let the Deputy have the information if he puts down a question seeking it.
Is the Minister aware that in accordance with the terms of the circular letter dated 20th February local authorities who are preparing purchase schemes and intend to sell houses to tenants find that they can no longer carry out minor repairs to those houses, such as the replacement of the doors or windows, the improvement of serious wiring defects or defects in the sanitary accommodation which show up on inspection? Is the Minister aware that it is not the fault of the tenants, or the local authorities, that there is a serious economic situation at present?
The Deputy is developing an argument rather than asking a relevant supplementary question.
Apparently, the Deputy is not aware that it was not this Government who introduced the Bill which became an Act which laid down that only structural repairs should be carried out when a tenant was purchasing a house. If a local authority carry out certain repairs they are not queried by the Department of Local Government but if after the house has been sold an appeal is made, only structural repairs can be carried out and they include outer doors and windows. The Deputy should look up the circular and the Act relating to those matters.
What about the serious economic situation the Minister referred to in the course of his reply?
Has the Deputy a solution for it?
We will have one soon.
It would want to be a lot better than the one they had when they were 16 years in office because they did not seem to be doing too well then.
The country was doing well at that time.