Private Members' Business. - Local Loans Fund (Amendment) Bill, 1986: Second Stage (Resumed) and Subsequent Stages. – Dáil Éireann (24th Dáil) – Tuesday, 17 Jun 1986

Private Members' Business. - Local Loans Fund (Amendment) Bill, 1986: Second Stage (Resumed) and Subsequent Stages.

Question again proposed: "That the Bill be now read a Second Time."

Mr. Browne

The Local Loans Fund provides capital to local authorities to finance their capital expenditure for the year. The total provision for SDA loans is £83 million. The increase last week to £21,000 with a £10,000 income limit, was welcome. One area which is of concern to me is repayments. Many people are unable to make repayments. There is no way that the local authorities can reduce the repayments if a person loses his job and is not in a position to meet the mortgage repayments.

The number of local authority houses has increased from 7,900 in 1982 to 11,750 in 1985. Yet the construction industry is in a shambles at present and many workers have no jobs. The £5,000 grant scheme is a good scheme. One problem with this scheme, particularly in one local authority area, Enniscorthy, is that many people who are in employment are leaving the area. This means that the majority of tenants in the area are unemployed. This creates a ghetto style housing area. I am concerned about that. The only people who can avail of the £5,000 grant are people who are working and have an income. There seems to be a delay in the payment of the £5,000 grant. People have to get bridging loans from the banks to make up the difference. One wonders if the county council could make the full loan available and the £5,000 grant could be paid to the county council. That might not be workable but it should be looked at. We all know that the banks charge high interest rates on bridging loans. Banks have a duty to ensure that, if people look for bridging loans in order to secure their own homes, they should make it available at reasonable interest rates and not at the exorbitant rates they are charging at present.

What happened to the tenant purchase scheme? Does the Minister intend to resume this scheme? Many people make inquiries to the local authorities about this scheme and the possibility of buying their houses through that system. It is two years since the last scheme was introduced. The Minister should consider reintroducing this scheme.

A substantial number of local authority houses are being built throughout the country, particularly in Enniscorthy and in County Wexford. I ask the Minister to ensure that the single rural cottages will continue. The Department prefer to see a housing scheme being built rather than single rural cottages. Those are important to people, particularly those who live in existing council cottages and whose son or daughter would wish to avail of the council site. I ask the Minister to ensure that that is continued and that the Department, through bureaucracy and red tape, do not get their way and have the isolated rural cottage done away with. It is a very important aspect of rural life throughout the country.

Recently many people availed of Housing Finance Agency loans because of the 20 per cent repayments. One wonders if the loan would ever be paid back on this basis because interest rates fluctuate. People tell public representatives that they pick this loan because, if they lose their jobs, they will only have to pay 20 per cent of whatever money they will get. If people lose their jobs the loan will probably not be paid back during their lifetime. The banks are not interested in making loans available to the lower income bracket. For that reason the SDA loan and the HFA loan are worthwhile, certainly in the interests of people in the lower income bracket.

I ask the Minister to look at the £5,000 grant scheme. I am concerned about the large numbers of people in employment leaving local authority houses and being replaced in the main by unemployed people. It is not the people's fault if they lose their jobs, but there should be a balance in housing schemes with a certain number of employed people and a certain number of unemployed.

Minister of State at the Department of Finance (Mrs. A. Doyle)

The legislation before us is purely technical and is non-controversial. The purpose of the Bill is to raise the limit on issues from the Local Loans Fund by £1,000 million to £4,500 million. As all Deputies agree, the Local Loans Fund makes loans available to local authorities for capital works. The statutory ceiling has to be increased every couple of years as demand dictates. The last amending Act of this kind was passed in 1983.

I thank Deputies from the other side of the House for their very constructive contributions. I reassure Deputy O'Kennedy in particular that the reason he has to put up with me is for no other reason than that I have the responsibility for the Office of Public Works as junior Minister for Finance. The Office of Public Works and the Commissioners of Public Works administered the Local Loans Fund for many years. Deputy O'Kennedy made the point that if the Minister for Finance was not present the very least we should do is to have the Minister for the Environment present. He managed to phrase it quite graciously and did not mean it in a personal way.

Mr. G. Collins

It is a pleasure to see the Minister present in her official and personal capacity.

Mrs. A. Doyle

Deputy O'Kennedy wanted to know why the Minister for the Environment, who is spending most of the money which we are talking about, is not present. There is food for thought there and much thought has been given to that aspect. Essentially, this is a matter of funding of public programmes and they have been the responsibility of the Minister for Finance since 1887. The Local Loans Fund Act, 1935, superseded the national debt and the Local Loans Act, 1887, the Public Works Loans Acts and various others. The fund has been available for programmes operated by several Ministers over the years. In the past at any rate it financed education, health and harbour works. Therefore, the Minister for Finance has been the natural Minister to co-ordinate the funding.

Reference was also made to the financing of local government and democracy. As someone who has been a member of a local authority for 12 to 14 years, I appreciate the concerns which have been expressed. The Government are engaged in a major programme of local government reform including the organisation of local authorities, devolution of functions from central government, working relationships between elected members and representatives and managers. All of these points and financing generally have been referred to in the discussion this evening. I, for one, await the outcome of that programme eagerly, as do all the Members of the House who have an interest in local democracy. At present the Exchequer provides 62 per cent of the current funds of local authorities and over 95 per cent of their capital funds. Clearly, if local democracy is to be meaningful, local authorities should be able to obtain more locally sourced funding. Naturally, much reference was made to housing which is the major issue as far as most local authorities are concerned along with the roads issue which does not concern us this evening. As well as providing generous funding the Government are providing diverse support for a various range of issues. For example, SDA loans, which are repayable on an annuity basis; HFA loans, with income related payments for the first five years and annuities thereafter; and various other aspects which I have mentioned earlier in my speech.

Similarly, the £5,000 grant is enabling people to vacate local authority housing and acquire homes of their own. This supports the concept, which I hold dearly, of maximising home ownership in the country. In relation to the grant, Deputy Browne made a very valid point and it is one which will have to be watched carefully. It is only a worrying point in the short term in that many of the people vacating local authority estates at present are leaving behind a majority who are unemployed and have been unemployed for a long time. Consequently, they are not in a position to take similar steps for themselves. Sixty per cent of those unemployed today will have found work by next year. I am not saying there will not be more unemployed to keep the figure up. Even though there is an initial difficulty in the short term of the social structure as a result of this grant, the Deputy will agree with me that, quite frankly, it is an excellent scheme and one to be encouraged. In 1985, 2,200 people left local authority houses and built or purchased homes of their own. Effectively, for £5,000 a house the State acquired 2,200 houses which were made available to those who could not house themselves. We would all support that, mindful that there would be a short term problem. But that will sort itself out as time goes on.

The building societies were also referred to. I agree that a review of their role is desirable. The Government issued a discussion document on this subject a few months ago. The submissions are being examined at present. Deputies also referred to houses lying vacant. I think it was Deputy O'Kennedy who made this point. This in a way reflects the success of our building programme and the great inroads which have been made in providing houses in recent years. I accept that there are local pockets of difficulty. I do not think we could say the difficulty in certain areas where there are vacant houses reflects that there is no need for houses in those areas. We all know there are other reasons why some houses appear to be less acceptable to would-be local authority tenants than others. That is not for us to resolve tonight. I acknowledge that that difficulty exists and needs careful monitoring.

Deputy O'Keeffe made strong reference to water supplies and servicing, particularly in rural areas. I would like to assure the Deputy that 80 per cent of the population are connected to piped water systems and over 64 per cent to the public sewerage system generally. If I could for a moment put my Department of the Environment hat on and respond by saying that the Department of the Environment continue to provide grants for group water schemes, and over £3 million was specifically allocated for farmyard water supplies in 1986.

I would also concur with the views expressed by Deputy Browne that we continue our policy of rural cottages. Tremendous benefit accrues in rural, remote and isolated areas by ensuring that a nucleus of life continues. People are still working on the land and in certain coastal regions it is essential that we continue to have people living in these areas. Also, there are people who for many different reasons would not like to live in a housing estate and have always lived in isolated locations. As far as is practicable we must continue that policy and, I, for one, support it.

Again, I thank the Deputies for their co-operation and I commend the Bill to the House.

Question put and agreed to.

Bill put through Committee, reported without amendment and passed.

Dáil Éireann debate -
Tuesday, 17 Jun 1986