I move:
That a supplementary sum not exceeding £1,759,480 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1977, for the salaries and expenses of the Office of the Minister for the Environment including grants to local authorities, grants and other expenses in connection with housing, and miscellaneous schemes and grants including a grant-in-aid.
Deputies will have noticed that the name of the Vote has been altered in line with the changes made some months ago in the designation and role of the former Department of Local Government. The Taoiseach, in advising the House of the intention to make these changes, indicated that the new Department would have the primary responsibility for environmental matters and that this was considered appropriate because of the widespread functions of the Department of Local Government in building and the provision of roads, other services and amenities. The arrangements that may be necessary to give further effect to the Department's special role on environmental matters are at present under consideration. Obviously it is something that requires a good deal of consultation with several other Departments. In the meantime my Department will continue to promote the welfare of the physical environment. This will be done mainly, as in the past, through the local government system by which pollution is controlled and the quality of the environment protected through the operation of the physical planning system and the provision of key environmental services. We are, therefore, still very much in the business of local government, which must continue to be strong and effective if the environment is to be healthy.
Local government is big business in terms of the services it provides for the good of the community and in terms of the employment it both affords directly and supports in the private sector. Not least, it is big in terms of the finances it requires to provide those services and that employment. The present Supplementary Estimate is for a gross amount of £6,792,480, which is offset in part by savings of £5,033,000 elsewhere on the Vote. The net sum required is £1,759,480. Accordingly, the total net provision for the Department's Vote for the present year comes to £85,874,500. Great as this total is it represents part only of the total expenditure on local government services in 1977. Money for the services is also provided from the Local Loans Fund, from the Road Fund and by local authorities from their own resources. When all these moneys are reckoned, the overall total is estimated to be over £450 million. Of this sum about £270 million is financed from Exchequer sources.
The present Supplementary Estimate is spread over nine subheads. The two largest of these—subheads M and S— are closely linked in the sense that each of them deals with expenditure on roads. When I took office the total grants allocated for 1977 to local authorities for road works were £26.57 million. This comprised £17 million from the Road Fund, £7.57 million originally provided in subhead M of the Vote, and a further £2 million provided by the former Minister for Finance in this year's budget.
One of my first tasks as Minister was to identify areas under my control where additional employment could be generated in accordance with the Government's policy on job creation. As part of that exercise I examined the position of the building and construction industry which has suffered high unemployment in recent years and which is affected by the level of activity of local authorities, including their road works programme. As part of a package of job creation projects announced by the Government shortly after taking office the allocations to local authorities for road works was increased substantially so allowing additional road works schemes to a total value of £5 million to be commenced in 1977. The expanded grants programme and the contribution by local authorities will ensure that something of the order of £63 million will be expended this year on road works.
As a result of the Government's action, grants allocated for road improvement works this year amount to £16.193 million compared with £6.732 million in 1976 and, taken in conjunction with the normal proportion of block grants devoted to the same purpose, represent a total State investment of about £21 million in improvement works on public roads in 1977. This expansion of the works programme is an indication of the importance I attach to the development of our public road network, having regard to the part it plays in the environmental, industrial, agricultural, commercial and social life of the country, its on-site and off-site employment potential, and its value to tourism.
In order to meet the payments falling due in respect of the foregoing roads programme in the current year and also to meet £4.35 million for administrative and so on expenses, including costs of collection of road tax and a contribution to the Garda Vote, as against £4.25 million provided for these purposes in the budget, it is necessary to increase the amount of the Exchequer grant under subhead M of the Vote from £9.57 million already voted to £12.17 million and I have, therefore, provided in the Supplementary Estimate for an additional amount of £2.6 million under the subhead.
One of the first duties I had to undertake as Minister was to introduce a token Supplementary Estimate related to the Government's undertaking to abolish the annual road tax on certain vehicles. I intimated at the time that a substantive Supplementary Estimate would be introduced when the effect on Road Fund income could be more accurately measured.
Due to the abolition, with effect from the 1st August last, of the tax on all "private" cars not exceeding 16 horse-power and on all motor cycles, it is estimated that the total income which will accrue to the Road Fund this year from motor taxation, and so on, receipts is £18.1 million. The expenses of the fund are £33.42 million, comprising £29.07 million in respect of grants to road authorities and £4.35 million in respect of the administrative and so on expenses to which I have referred above. Allowing for £12.17 million voted moneys under subhead M of the Vote, the additional amount now required under subhead S to meet the shortfall in motor tax receipts to the Road Fund in 1977 is £3.15 million.
The local improvements scheme provides seasonal employment on non-public roads and minor drainage projects. The number of applications on hands with local authorities has increased very substantially. In order to provide additional employment in 1977 I have increased the original provision for the scheme under subhead J from £1 million to £1½ million.
The extra provision required in subhead R is a direct result of the swift action taken by this Government in implementing its election manifesto. As I announced in Dáil Éireann on 6th July, 1977, the manifesto undertaking to give a special new house grant of £1,000 has been implemented with effect from the 27th May, 1977. The new grant is payable to persons purchasing or building a new house or flat who have not already purchased or built a dwelling for their own occupation. This new scheme was considered necessary mainly because of the financial burden on many, particularly young married couples, who are anxious to provide their own homes but were not entitled to any grant to do so because of the inequitable and highly restrictive means test for State grants imposed by the previous Government. The income limit imposed was as low as £1,950, plus £100 for each dependent person up to a maximum of £400, which debarred the great majority of house purchasers, including persons of very modest means from obtaining any great assistance. This decision to restrict new house grants to persons eligible on an income or valuation basis for supplementary grants from local authorities resulted in a massive reduction in grant activity. Only 6,388 grants were allocated last year compared with a total of 16,166 in 1975. In the first six months of 1977, only 2,050 grants were allocated and in the third quarter of 1977, the number fell to only 601. Thus only 2,651 grants were approved altogether in the first nine months of 1977. When introducing the £1,000 new house grant scheme, I took the opportunity to simplify and streamline procedures and to abolish unnecessary complexities. Under the old scheme, there were so many variations in the State grants payable that it was confusing to the public and obviously overdue for review. Another example was the method of calculation of the net floor area measurement which was unnecessarily complex. I replaced this with a simple gross area measurement.
Since the introduction of the scheme on 6th July last, there has been an unprecedented demand for application forms and it is certainly true to say that the scheme has captured the public interest. Up to 2nd December applications had been received from 6,414 applicants of which 1,685 were approved, 129 paid and 342 rejected. The remaining applications are under examination and in the majority of these further information is awaited from the applicants. I expect the vast majority of them will be approved.
The amount provided in the original 1977 estimate for new house grants was £2.5 million. When I announced the implementation of the £1,000 grant on 6th July, I had expected that the original allocation would be fully used this year on the old scheme of grants. However, because of the falling off in activity under the old scheme, which is understandable in view of the restrictions imposed on eligibility by the previous Government, estimated savings of £300,000 will arise this year on the old scheme of new house grants. Since it is an essential condition of the new scheme that a house must be completed and occupied before the grant may be paid, it is expected that payments under the new scheme this year will not exceed £280,000.
In implementation of a further one of the measures announced in the Government's programme on job creation, I introduced last August a scheme of grants to local authorities for certain environmental works which will provide about 250 new jobs. Allocations totalling £500,000, related to local unemployment figures, were notified to local authorities for works to be carried out under the scheme. The grants are based on 100 per cent recoupment of labour costs and 50 per cent of other expenses. The works selected by local authorities must have a high employment content and be of environmental benefit to the community. Provision is made in subhead G for a sum of £200,000 to meet payments to be made to local authorities before the end of the year on foot of work done under the scheme this year.
The Supplementary Estimate includes additional amounts of £90,000 required under subhead A for salaries and so on of departmental staff and £23,500 under subhead I to increase the grant-in-aid towards the administrative expenses of An Foras Forbartha. The need for these amounts arises from the application of the two phases of the 1977 National Wage Agreement and the removal of marriage differentials in certain salary scales.
Under subhead C a further £45,000 is needed to meet the extra cost of Post Office services attributable to higher postal and telephone charges. The amount to be received in appropriations-in-aid—subhead P—is being increased by £96,000. This arises from higher recoupments in respect of departmental administration costs from the Road Fund and by local authorities in respect of the operation of the combined purchasing system. There is a minor offsetting reduction in receipts of £4,000 arising from the termination of application fees for new house grants.
