I move:
That a Supplementary sum not exceeding £13,777,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1986, for the salaries and expenses of the Office of the Minister for the Environment, including grants in lieu of rates on agricultural land and other grants to Local Authorities, grants and other expenses in connection with housing, and miscellaneous schemes, subsidies and grants including certain grants-in-aid.
This supplementary estimate is necessitated by: (i) a greater demand for the £5,000 grant for local authority tenants than had been anticipated; (ii) Government decisions during the year relating to the Housing Finance Agency and flood relief measures; (iii) adjustment of the grant in lieu of rates on agricultural land consequent on the results of land assessments carried out up to the end September 1986; (iv) the enactment of the Dublin Metropolitan Streets Commission Act, 1986, and (v) costs in connection with the oil pollution threats to the south west coast.
The Supplementary Estimate involves a redeployment of the Environment Public Capital Programme allocation to the extent of £12,662,000 and a nett increase in current expenditure of £1,115,000. I want to make it clear to the House, therefore, that this Estimate represents a nett increase in public expenditure of only £1,115,000.
In my reply to the debate on Second Stage of the Housing (Miscellaneous Provisions) Bill, 1985, on 4 November last I dealt in some detail with the transformation of the housing situation that has been brought about as a result of the effectiveness of the Government's housing policies. Not only have these policies radically increased the numbers of persons housed by local authorities but also they are now significantly reducing the cost of the programme to the taxpayer. In 1982 some 7,900 applicants were housed from the local authority housing list which at the time stood at just 30,000 applicants. Last year 11,800 applicants were housed, an increase of 50 per cent on the 1982 figures. This year it is likely that a similarly high figure of the order of some 11,000 applicants will be housed by local authorities. The waiting lists which stood at 30,000 when the Government took office have been reduced to 22,000 or, I suspect when the official figures are published at the end of the year, somewhat fewer. In addition, a large proportion of those on the waiting lists have been offered and have declined accommodation as they wish to obtain accommodation in a particular location. This radical improvement can be attributed in the main to two policy measures, the £5,000 grants for tenants surrendering their houses and providing for themselves in the private sector and the availability through the Housing Finance Agency and local authorities of suitable loans which have enabled thousands of families of modest means to provide their own houses rather than rely on public housing.
The significantly reduced pressure on local authority housing has enabled us to redeploy some resources from the local authority house building programme and into these two schemes. The objective of the local authority housing programme is to provide accommodation for persons unable to obtain suitable accommodation from their own resources. This objective can be achieved either by the provision of a new local authority dwelling or by the release for reletting on an existing one. The £5,000 "surrender grant" scheme is about six times as effective in housing applicants as direct investment in the building of new local authority housing. Of course, the scope of the £5,000 grant is essentially limited and a need will remain for a direct local housing building programme. However, by balancing a surrender grants scheme with a substantial house building programme the Government have shown clearly that record levels of applicants can be provided with housing and waiting lists significantly reduced or virtually eliminated in certain areas.
This year the demand for this grant has continued to exceed expectations. Since the inception of the scheme two years ago nearly 8,500 applications have been received and about 6,000 houses have become available to local authorities for reletting. As part of the redeployment of resources referred to, the Supplementary Estimate makes provision for an additional £5 million to meet grants maturing for payment in the current year. This year total grant payments will number 3,350.
Another element of the redeployment is the provision of a grant of £6,912 million to the Housing Finance Agency under a new subhead D.7. Arising out of the Government's review of the operations of the HFA earlier this year and the subsequent restructuring of their financial arrangements it was decided that a special capital injection should be made to the agency.
The restructuring of the agency's financial arrangements arose principally from the need of the agency, due to changed conditions in the financial market place, to rely on costly short term borrowing to fund its operations. The changes made in the agency's scheme were also designed to deal with a bad debts problem. The payment of the grant will place the agency on a firm financial footing and allow them to continue in their present role of providing funds to housing authorities to make house purchase loans available to persons of modest means. As part of the restructuring, the agency's borrowing arrangements have been broadened to allow them to raise long term funds on a conventional basis and an interest swap arrangement will apply to assist the agency in matching the cost of such funds with the return they can obtain from income-related repayments by borrowers.
Since they were established in 1981 the Housing Finance Agency have advanced over 15,300 loans valued at over £300 million. They now play a critically important role in the provision of mortgage finance for people on modest incomes. Three repayment options are now offered — a convention annuity system, an income related repayment option similar to the HFA scheme and a new convertible repayment option offering income-related repayments for the first five years and then reverting to an annuity system for the balance of the life of the loan. These changes followed close on the £5,000 increase in the maximum loan limits which I announced under the SDA loan scheme from 5 June 1986 and the increase to £10,000 in the income limit under the scheme. There is now a range of publicly funded house purchase loan schemes offering loans of up to £25,000 or £27,000 and a range of repayment options.
Yesterday, I informed housing authorities of a 1 per cent increase in the interest rate on annuity and convertible loans for house purchase and improvement. While I regret that some adjustment in the rate was unavoidable having regard to current trends in interest rates, generally, I am happy that the Government have been able to keep the increase down to 1 per cent. This will leave the interest rate on SDA type loans at 10.75 per cent which includes a change of 0.25 per cent in respect of mortgage protection insurance. I have no doubt the House will contrast this rate with building society rates which are now running at 12.5 per cent. As the interest rate on all SDA type loans is fixed for the life of the loan, yesterday's increase will not affect existing loans.
As the House is aware the severe damage caused by last August's storms met with an immediate and effective Government response. Among the measures taken was the allocation of an additional £1 million to the task force on special housing aid for the elderly to rehabilitate houses affected by the flooding. At about the same time the remit of the task force was extended to enable them to help where the houses of needy and disabled persons were in need of essential repair. This £1 million is provided for by way of an increase in the grant-in-aid under subhead D.5.
The various local authorities in the areas affected by the flooding were given the immediate go ahead by the task force to carry out on a recoupment basis necessary structural repairs and basic decoration. Dublin Corporation and Wicklow County Council were the two local authorities most affected but others such as Dublin, Cork, Kerry, Meath and Kilkenny County Councils are also involved, even though to a much lesser extent.
Another of the measures taken to alleviate flood damage was the announcement of a grant of £100,000 to Tipperary North Riding and Limerick County Councils for emergency repair works to the Mulcaire river. I understand that the two county councils are proceeding with the necessary scheme of repair works under the Local Authorities (Works) Act, 1949. It involves remedial works on breached and weakened embankments as well as removing trees, brushwood and shoal formations at various locations along the Mulcaire and its tributaries. The £1,000 is included in subhead W, item 19.
The level of the 1986 grant in lieu of rates on land was determined on the basis that local authority revenue from the farm tax during the year would amount to some £6 million.
Following the publication of classification lists of assessed holdings in each local authority area, authorities have now virtually completed the process of levying this tax in respect of 1986. However, having regard to the results of farm assessments to date and after due allowance for marginal relief and other factors, it is estimated that the total farm tax liability this year will be approximately £5 million.
Accordingly, the Supplementary Estimate includes an increase of £1 million in the agricultural rate grant in respect of this shortfall. The revised provision in subhead N will be £120.5 million.
The Supplementary Estimate includes a sum of £100,000 to meet costs falling on my Department in respect of environmental protection measures mounted to deal with oil pollution from the Kowloon Bridge and the risk of pollution from the damaged tanker Capo Emma. My Department's Vote normally includes a contingency sum for emergencies of this type, while there are established procedures for the immediate release of any additional funds that may be required in an emergency. My responsibility in relation to incidents such as the Kowloon Bridge and the Capo Emma is to deal with pollution arising and to protect, as far as possible, important marine life and amenity areas and to arrange for clean up of contaminated areas.
Arrangements to deal with oil pollution incidents were last reviewed by the Government in 1984. It was then decided to augment contingency measures, which essentially relied on local and regional responses to pollution, by establishing the operations group which would exercise overall central direction and control of operations to deal with major spillages threatening or affecting the shores. The group is under the direction of a senior inspector from my Department, and includes representatives from the Departments of Communications, Tourism, Fisheries and Forestry, Defence, the Naval Service and local and harbour authorities.
The Kowloon Bridge and Capo Emma incidents presented the first occasion on which it was necessary to call in the group. Members of the group were placed on standby on 18 November when first reports were received that the Kowloon Bridge and Capo Emma were in difficulties. The group was directed to intervene on 23 November in view of the increased pollution threat posed by the Kowloon Bridge following its abandonment. By 7.30 a.m. on 24 November, control centres were set up in Skibbereen and Bantry, the latter to deal with any pollution risk posed by the Capo Emma. Priority areas in this vicinity of the Stags Rock, including Lough Hyne, were identified and special arrangements made to protect some of these, using booms. It was necessary to concentrate on protection and shore clean-up measures as the fuel oil on the vessel does not respond to dispersants.
In accordance with a direction issued by the Minister for Communications the owners of the Capo Emma are proceeding with arrangements for the removal of oil from the vessel. I understand that this operation is due to begin today if local weather conditions are favourable.
Protective measures, involving the use of booms and the provision of vessels for spraying dispersants, were taken at Bantry Bay in anticipation of the transfer of the crude oil cargo to another tanker. The first phase of this operation involving the offloading of 36,000 tonnes of oil was completed successfully. The operation will be completed as soon as weather permits.
I am satisfied that arrangements to deal with pollution, in so far as they came within the remit of my Department, have been found generally adequate. The need to respond to two incidents simultaneously presented special challenges. I want to place on the record of the House my appreciation of the commitment shown by the staff of my Department, the local authority and indeed the whole operations group in dealing with these two major problems to date.
I have no doubt that the operations group and all concerned have learned by these experiences. My Department will be reviewing their contingency arrangements to deal with oil spillages and will put to good effect the experience gained so as to improve arrangements in whatever respects may be necessary.
I expect that the additional provisions sought will be sufficient to meet payments arising in the current year. I will seek additional funds next year should this prove necessary. I will be seeking full compensation for any costs to public funds arising from these incidents.
The provision of £20,000 in subhead Y is to enable the Dublin Metropolitan Streets Commission to be established. I intend to make an establishment order presently, to appoint the members of the commission and to bring it into operation before the end of the year. The commission will have special powers during its three year life to improve the area designated as the metropolitan central area. This area comprises O'Connell Street, Westmoreland Street, D'Olier Street, College Green and Grafton Street together with short lengths of the side streets off those streets and was chosen because of its special importance not only for Dubliners but for visitors to our country. A concentrated effort to improve environmental conditions and raise the standards of civic amenity in the very heart of the city will bring many benefits to the business community and the ordinary citizens of Dublin and will make our capital city a place to be proud of once more. This special investment of time, expertise and money will, with the cooperation of all who have Dublin's best interests at heart, bring new life to Dublin's centre.
I commend the Supplementary Estimate to the House.