I move: "That the Bill be now read a Second Time."
This Bill represents a very significant expansion of housing legislation in this country. As such, it is a measure of primary social importance. In it we are legislating for the seminal housing reforms enunciated in the Government's Plan for Social Housing which was published in February 1991.
The social housing plan restates the long established objective of Government housing policy of ensuring that every household has a dwelling suitable to its needs, located in an acceptable environment, and at a price or rent that household can afford. The strategy to achieve this broad objective includes: promoting owner-occupation as the form of tenure preferred by most Irish people; developing and implementing a range of measures designed to address the wide and changing range of social housing needs; and mitigating, as far as possible, the extent and effect of social segregation in housing.
The strategy is an overall one which embraces all housing sectors including owner-occupation, local authority, private rented and voluntary housing. The basic elements of the plan were agreed with the social partners in the Programme for Economic and Social Progress. The plan is, therefore, part of the agreed national development strategies for the nineties.
The plan introduces new thinking to the ways we, as a community, respond to social housing needs — new thinking that is informed by the changing nature of those needs, the necessity to get the best value for public money spent, the ideal of enabling people to help themselves, the principle of devolution, and perhaps, above all, the lessons of the past. The range of innovative measures included in the plan is designed to provide a broader, more diverse response to social housing needs, to ease the path to home ownership for households of modest means and to improve the position of tenants in both the local authority and private rented sectors.
I want to make it clear that the plan is intended to supplement, not to supplant, the traditional local authority house building programme. Indeed, there is a commitment in the plan and in the Programme for Social and Economic Progress to maintain the local authority programme at an appropriate level having due regard to resources and to the impact of the alternative measures.
The plan does, however, signal for the future a reduction in the historical degree of dependence on local authority house building. It is not the Government's intention to return to the policy of building large schemes of public housing on green field sites on the periphery of cities and towns. There are many compelling reasons to consider a more diverse approach. There are social reasons relating to the need to limit housing segregation and develop more socially mixed communities. There is a need to encourage people towards self-help and co-operative effort by making available appropriate subsidy schemes, to give them a choice about the kind of housing they want. The high costs of the traditional approach to the public purse cannot be overlooked either. Here, I refer not just to the initial cost of providing the houses but, perhaps more significantly, to the ongoing cost burden which maintenance and management of local authority estates places on the taxpayer.
The new social housing measures that could be operated in advance of legislation are already being implemented by the local authorities on the basis of interim arrangements devised by my Department. This approach had a twofold advantage — first, it meant that qualified households could benefit from the schemes without having to wait while the legislation was being processed and, second, the legislation itself should be the better for having working experience of the schemes.
I have to say that the performance of housing authorities in the implementation of the interim arrangements has been uneven. Some authorities have quite a successful record of exploiting the new schemes, others, at least in the initial period, have not. However, the most recent returns becoming available to my Department for the first quarter of this year suggest a substantial improvement in performance generally.
For instance, in the shared housing scheme the total number of applicants for 1991 was 1,209 and it was 530 for the first three months of this year; in the case of the local authority housing improvement work scheme, the total number for last year was 409 and it was 401 for the first three months of this year; the total number of approvals to individuals for housing sites last year was 36, and 107 for the first three months of this year; the total number of mortgage allowances last year was equalled in the first three months this year. I give those figures to the House because there was some resistance from locally elected members who genuinely felt that the traditional methods were the only way to solve this problem.
With understanding of the variety and depth of social consideration that has gone into the social housing plan, we are beginning to see results and I want to urge Members of this House and locally elected representatives to understand that we will not return to the old type solutions of socially segregated large schemes on the periphery of towns without many of the services and facilities which families require and drawing together many people who have little in common but their age group and their need for housing, many of whom are unemployed. In the future we want to have a better mix and the response from local authorities in the first couple of months in this year are a real indication of a positive attitude to the plan at this time.
This year, as the plan measures show significant results, we can expect a substantial increase in the social housing provision — catering for up to 7,000 households compared to just over 5,000 last year. These global figures include local authority lettings and voluntary housing as well as the new measures. The enactment of the Bill, by providing proper statutory authority for these measures, should boost progress on the schemes already in operation by extending the ways in which they can work, including the involvement of the private sector in crucial areas such as shared ownership. It will, of course, also bring to fruition the other measures that it has not been possible to implement for legal reasons.
This Bill will repeal what remains of the 1970 Housing Act. The full corpus of primary housing legislation will then be found within the covers of four statutes, namely, the Acts of 1966, 1979, 1988 and 1992. The Housing Act, 1966, is the foundation stone of modern housing legislation and provided the legal framework within which our modern housing system has developed. The 1979 Act updated procedures in relation to loans and grants and new house prices.
The 1988 Act, for the first time in Irish housing legislation, made statutory provision to address the housing needs of homeless persons. It gave local authorities extensive and flexible powers to deal with homelessness and it revised the law in relation to the planning, provision and allocation of local authority housing. It provided for full assessment of housing needs in a way that ensures that the needs of the homeless, travellers and other disadvantaged groups are taken into account. The fact that, in this Bill, we now have another major measure, relatively soon after the important 1988 Act, shows that in recent years housing policy has been developing at a pace that may not always be appreciated.
The scope of the Bill is broad. There are a number of areas where the Bill breaks important new ground and which merit particular attention. They are shared ownership, improvements by local authorities to private houses as an alternative to rehousing approved applicants, new arrangements for the subsidisation of voluntary housing, comprehensive and flexible lending powers for housing authorities, participation by local authority tenants in the running of their estates, streamlined provisions for the sale of local authority houses and flats to tenants and a new charter for the private rented sector. I will now discuss the Bill by reference to these headings.
For some years, there have been suggestions that a shared ownership system should be introduced to improve access to owner-occupied housing for low income households who cannot afford to buy a house in one step with a conventional mortgage. Following detailed consideration of the best means of giving effect to the concept of shared ownership, the system involving the granting by local authorities of a special type of lease, called a shared ownership lease, was introduced in the social housing plan. Specific legislative provision is needed for it as there has been a general prohibition on the granting of new leases for houses since the passing of the 1978 Landlord and Tenant Act, which prevented the creation of new ground rents. The Bill provides a proper statutory footing for the interim arrangements under which the shared ownership system has been operated by local authorities since last year. It will also open up the possibility of this form of tenure being offered by bodies other than housing authorities. Given the novelty and relative complexity of the shared ownership concept, I propose to deal with it as fully as possible and to cover points on which Deputies have been seeking clarification.
The need to put up, at the outset, 100 per cent of the purchase price, by way of a loan and a substantial deposit, reduces, or even rules out altogether, the prospect of home ownership for many on lower incomes who would see it as their preferred form of tenure. By having to wait until they can afford conventional house purchase, such persons may not be able to go ahead until a stage when the cost might be much greater, or they may find that the opportunity to purchase continues to elude them. This is where shared ownership provides a solution. The Bill will make the acquisition of a home of their own, through the shared ownership system, a viable proposition for households which would otherwise have much less chance of realising their ambition. Shared ownership will give them the opportunity of selecting a house of their choice and going into occupation of it with a minimal deposit and with regular outgoings that are significantly less than under a conventional mortgage.
Basically, shared ownership allows a person to acquire a house by purchasing only a portion of the equity from the owner at the outset. On foot of that initial payment the person is granted a shared ownership lease. This entitles the person to occupy the house during the lease period with a right to buy out the lessor's remaining equity on a deferred basis and on agreed terms.
Section 2 contains the general power to grant shared ownership leases. It allows such a lease to be granted by any person and this would include a housing authority, a financial institution or a developer. It stipulates that the lease period must be between 20 and 100 years and that a payment of between 25 per cent and 75 per cent of the value of the house is made by the lessee for the lease. The lease must also confer on the lessee the right to purchase the lessor's interest in the house on terms determined in accordance with the lease itself.
The basic parameters, both in relation to the term of the lease and the proportion of the equity initially purchased, have been designed to ensure that the exemption from the ban on new leases is not used to facilitate the introduction of new ground rents. Only bona fide shared ownership transactions can avail of the exemption. The initial equity stake of between 25 per cent and 75 per cent recognises that shared ownership is not a realistic option for a purchaser who is unable to raise at least one-quarter of the purchase price at the outset. Conversely, anyone who can put up over 75 per cent of the cost should be able to acquire a house in the ordinary way and should not need to go the shared ownership route.
These general conditions represent the fundamentals of a fair and workable shared ownership concept. The other details in individual cases, where the local authority is not the body granting the lease, will be worked out between the parties involved in accordance with their respective requirements.
Section 3 deals specifically with the granting of shared ownership leases by housing authorities. The detailed provisions of such leases, eligibility, etc., will be spelt out in regulations to be made by the Minister under this section. Deputies will be familiar with the shared ownership system being operated by housing authorities under the interim arrangements already in force. Section 3 provides the framework for that system and is wide enough to accommodate any adaptations of it.
Section 4 provides broad powers for the payment of subsidy towards rent payments by lower income households in shared ownership. Details of the subsidy will be provided for in regulations. Payment of rent is a feature of the system since the occupier under a shared ownership lease has only paid a portion of the value and is not the full owner. Therefore, it is open to the lessor — be it a local authority or other body — to charge a rent for occupation until the buy out of the lease has been completed. The purpose of the subsidy is to bring access to shared ownership within the capacity of households on low incomes and also to provide a cushion for those in shared ownership who may suffer a drop in earnings. Under the current system, a shared owner with an income of under £10,000 is eligible for a graduated subsidy.
Section 4 will enable the Minister to pay a subsidy where a lease is granted by a housing authority. There is also power for an authority to pay a subsidy in respect of a house held under a shared ownership lease granted by another body, with the Minister recouping the authority's expenditure.
Up to 31 March last, local authorities had received a total of over 1,700 applications for shared ownership. Of these almost 600 had received approval in principle with the transactions having been completed in some 70 cases. Progress in dealing with individual cases has, therefore, advanced considerably in the first quarter of 1992. By comparison with the current position, only 241 applications had been approved at the end of last year.
Shared ownership is new to this country but it has worked successfully elsewhere. I believe it can also have an important role in our housing system. I intend to review the operation of the current shared ownership system after we have about two years' initial experience of it. The provisions of the Bill are sufficiently flexible to facilitate any changes that may be considered necessary.
As I have said, the essence of the social housing plan is to broaden the range of possible responses to different social housing needs. In the past there has tended to be the opposite approach, a basic reliance on one solution — the provision of new local authority housing — to meet all needs. This often involved moving people away from areas where they had crucial family support and ties. We are all aware of the social problems caused by the concentration of the most disadvantaged in particular locations.
As many as 45 per cent of approved applicants for local authority housing are from households living in unfit, unsuitable or overcrowded dwellings. Up to now, the option of upgrading or extending some of those dwellings as a socially desirable and cost effective alternative to providing local authority housing has not been available. Section 5 changes that and should, in future, enable many housing applicants to obtain decent accommodation in their existing environment, possibly a lot sooner than if they were to wait to be rehoused.
It is expressly provided that works to provide houses under this section may only be carried out if they result either in a housing applicant being removed from the waiting list or the surrender of an existing tenanted or tenant purchase house to the housing authority. In return for the improvements, the authority may make a periodic or other charge on the beneficiary. They may also enter into an agreement with the owner of the house requiring, for instance, that the authority be recouped all or part of their expenditure in the event of the house being sold. Any such moneys due to an authority will, by virtue of this section, be automatically secured on the property.
Up to 31 March last, housing authorities had identified some 400 houses as being suited to the improvements scheme and work has already been completed in a number of these. The take up rate on this scheme to date has been slower than might have been anticipated but the provisions in the Bill should help streamline the legal procedures which have been a source of delay to some housing authorities.
The voluntary housing movement makes a substantial contribution to social housing output catering for people who would otherwise be dependent on public housing or institutional care. Voluntary housing activity has increased very significantly in recent years. All the indications are that, with the appropriate support from public funds, the voluntary sector can play a greater part in the provision of social housing in the future.
Under the social housing plan, the levels of assistance to approved voluntary bodies providing residential accommodation with the aid of the existing capital assistance scheme have already been increased. This scheme has been particularly successful in securing housing for special categories, such as the elderly or the homeless, and I expect that completions of dwellings aided under it will reach 550 this year. But the limitations of the capital assistance scheme in promoting family housing are acknowledged and that is why the plan announced the introduction of the rental subsidy scheme. This scheme allows approved voluntary and non-profit housing organisations to obtain 100 per cent capital loan finance from local authorities for the provision of social housing, subject to a guideline cost limit of £35,000 per unit. A subsidy is then payable to the body providing the accommodation to make up the deficit between the affordable rent payable by the tenant and the loan charges, with an allowance made for maintenance and management costs.
Section 7 contains the provisions relating to the rental subsidy. Again, these are broad provisions leaving the details of the scheme to be set out in regulations which may, of course, be changed from time to time. The subsidy has been introduced on an interim basis, being payable to voluntary bodies in respect of tenants on annual incomes of less than £8,000, and the response has been encouraging. One project is already finished, three projects containing 27 dwellings are in progress and some 20 more proposals representing an additional 370 units are in planning.
Some of the voluntary groups have suggested certain revisions to the terms of the pilot scheme and I have indicated to them that I will be reviewing it towards the end of the year in the light of experience.
Section 6 will permit the Minister to devolve to relevant housing authorities his function in relation to the approval of voluntary housing bodies. This would make it possible for new projects to be dealt with from conception to execution at local level — simplifying the whole process for individual organisations. In addition, the voluntary sector's expanding role is being acknowledged by the new facility in section 26 for the transfer of local authority houses to suitable voluntary bodies.
I have already referred to the particularly successful contribution of the voluntary sector in dealing with certain categories such as the elderly. Against this background, section 26 could prove to be attractive, for example, to residents of elderly persons' accommodation where the voluntary sector has an especially good track record of care and service.
The other side of non-profit housing is the co-operative movement — individuals coming together as a group to provide housing for themselves. Co-operative housing was reasonably successful up to the mid-seventies when about 500 houses were being produced annually but has since declined considerably. However, I believe that the various measures in the social housing plan have the potential, especially if used in a combined way, to revitalise the sector
Section 11 provides for the availability from the local authorities of block loans to co-operatives, as opposed to loans to each individual member, which will enable the co-operative to borrow upfront, for instance, to buy sites or to acquire existing buildings for conversion to housing. Local authorities are already free to dispose of sites to co-operatives at low or nominal cost, subject to certain conditions. The National Building Agency have also been given a brief to assist in the promotion of this form of housing.
Housing authorities have a long history of providing loan finance to persons of modest means. Under existing legislation they are confined to advancing loans to individuals and lack a desirable degree of flexibility. With the primary objective of giving housing authorities broader, more flexible powers in making and administering housing loans, section 11 restates in an improved and expanded form the existing lending provisions. Their lending powers are being widened to include shared ownership, the acquisition of land or sites, the purchase or conversion into housing of a building, the provision of hostel accommodation and even the payment of deposits for the purchase of property for housing. As I have said, this increased flexibility will be of particular benefit to voluntary and co-operative housing bodies. Detailed loan conditions including loan limits, eligibility, types of houses qualifying and matters relating to repayment, etc., will continue to be set out in regulations made by the Minister for the Environment, with the consent of the Minister for Finance.
Under section 11, the Conveyancing Acts will apply to housing authorities in the same manner as other mortgagees. This will enable householders with local authority loans to obtain finance from commercial lending agencies, for instance, for house improvements, on the security of a second mortgage. This is an important facility for many existing borrowers whose incomes would now prevent them getting local authority improvement loans. In addition, the section will remove any doubt about an authority's power to respond flexibly to borrowers in difficulty by capitalising arrears or extending the repayment period.
Another aspect of this section which I should mention is that housing authorities will be exempted from the requirement to pay any residue from a repossession to defaulting borrowers where they let them stay on as tenants, or provide them with alternative accommodation. Authorities will, nonetheless, have the discretion to make whatever financial settlement with such borrowers that they consider equitable in the particular circumstances.
The local authority housing stock consists of about 96,000 individual homes and is a valuable asset with a replacement value of well over £3 billion. My Department have, in recent years, been urging local authorities to manage and maintain this asset effectively to ensure that it provides the best possible living conditions and is conserved to the greatest possible extent. It is, however, becoming increasingly clear that all is not well in this area.
Particularly in the larger urban areas, there is growing tenant dissatisfaction, problems with the letting of dwellings in some locations, and a general sense of alienation which manifests itself in vandalism and other anti-social behaviour. That is in spite of annual expenditure of about £70 million by authorities on top of the £18 million provided by the State for housing remedial works and bathrooms. Clearly, it is time for a reassessment of the approach to the management of public housing.
One of the valuable lessons of the remedial works scheme over the past few years has been the benefits that have followed from increased consultation and dialogue by local authorities with their tenants during the various stages of the planning of projects. Tenant involvement is essential to break down the old "them and us" view and to foster a common interest in the maintenance and well being of the estates and the local environment generally.
Section 9 provides the framework for a progressive approach to the management and maintenance of local authority housing. It requires housing authorities to draw up a written statement of their policy in relation to the management of their rented dwellings, having regard to such aspects as the Minister may direct. This means that each authority will have to review their own performance, set out their targets and plans for future action, and have them agreed by the elected members. This must be done within one year of the commencement of the section but local authorities have already been asked by departmental circular to begin work on these policies.
Section 9 also provides flexible powers to enable authorities to delegate to tenants' representative bodies functions such as maintenance works, environmental improvements and collection of rents. Furthermore, all or part of the rental income may be assigned to such bodies to fund their delegated activities.
I want to make it clear that section 9 does not aim to impose a single system in all circumstances. Rather, the intention is to provide a statutory basis to enable authorities to devise the management and maintenance systems which are most appropriate to their particular requirements but which take full cognisance of the need to involve their tenants as closely as possible.
A principal objective of the Bill is to mitigate as far as possible the extent and effect of social segregation in housing. While steps were taken previously to reduce the density of local authority housing developments and ensure a better environment, this has not done anything to achieve a better social mix which is the root cause of many of the problems.
The Bill as a whole, by diversifying the overall approach to social housing, will create a significant move from one-class housing. It also contains, in section 28, a means, for the first time, of systematically counteracting undue segregation in housing. Housing authorities will be required, to draw up and adopt a written policy in this respect. Authorities have already been requested by circular to begin work on the development of their policy statements and in doing so to: consider purchasing existing new houses, as an alternative to building themselves; avoid large concentrations of single class houses which are inimical to the achievement of a good social mix; make existing lands owned by authorities which are suitable for housing available to individuals, voluntary bodies and co-ops; have regard to stated guidelines in relation to the size of local authority estates.
I expect that the policies adopted by housing authorities will differ, to take account of the incidence of the segregation problem from one authority to another and the need to develop the most suitable solutions to different situations. My concern will be to raise general issues that should be addressed rather than prescribe detailed solutions in every case.
The statutory provisions relating to the sale of local authority dwellings are comprehensively restated in section 26. The general terms of tenant purchase schemes will be set out in regulations and the elected members of each housing authority may then adopt a purchase scheme under which rented dwellings may be purchased by the tenants. The procedure of requiring each sale to be approved by council resolution will not longer apply to sales to tenants. However, the sale of any unoccupied dwellings will be subject to such resolution. In the interests of flexible housing management a housing authority may, subject to resolution of the elected members, also sell or lease tenanted dwellings to another authority or, with the consent of the tenants, to an approved housing body. I have already referred to this provision when speaking about the voluntary housing sector.
Local authority dwellings are sold on an "as is" basis and all subsequent maintenance then becomes a matter for the purchaser. Accordingly, I am taking the opportunity to clarify in this section the fact that once a sale has taken place the purchaser assumes responsibility for the dwelling and no warranty as to its condition or habitability is given by the housing authority.
Section 26 should eliminate the difficulties relating to the treatment of common elements that have arisen in connection with the sale of flats and which were brought to my Department's attention some months ago. These provisions should enable authorities to proceed with the sale of flats under the 1989 scheme without further delay.
While I have no immediate plans to introduce a new tenant purchase scheme, I will be keeping the matter under review. The emphasis now is on getting people into suitable accommodation and on the implementation of the various measures in the plan. The vast majority of existing local authority tenants have, in any event, had the opportunity of applying under the 1988 scheme. Persons leaving local authority accommodation to acquire their own homes can avail of either the £3,300 mortgage allowance scheme or the shared ownership system.
The private rented sector represents some 10 per cent of the national housing stock and is an important element in our housing system. As such, it needs to operate within a balanced legislative framework. This balance must be between the need to encourage investment in the provision and maintenance of accommodation on the one hand and, on the other, the need to ensure that tenants are treated in a fair and equitable manner. An in-depth review of the sector was carried out by my Department during 1990 in consultation with the various interests involved. The social housing plan stated that the review had shown some additional safeguards for private sector tenants to be desirable. These are provided for in the Bill.
The first measure affecting the private rented sector, section 16, deals with notices to quit, which are now to be regulated by statute for the first time. At present a landlord wishing to withdraw accommodation from a weekly tenant can generally do so at one week's notice. This can leave tenants in a vulnerable position without sufficient time to secure and move into alternative accommodation before the notice expires — particularly at certain times of peak demand. A tenant giving similar notice to a landlord may also leave the landlord in an equally unsatisfactory position with vacant accommodation on his or her hands on which he or she has heavy repayments or which is his or her sole means of income.
Section 16 means that in future all notices to quit must be given in writing and at least four weeks in advance. Notice by either the landlord or tenant for a lesser period, or which is not in writing, will not be legally enforceable once this section is in force. This will apply to existing as well as new tenancies. Contracts already requiring written notice of longer than four weeks will not, of course, be affected.
Section 17 empowers the Minister to make regulations obliging landlords to provide rent books for private rented dwellings generally or for particular classes of such dwellings. Rent books will contain documentary evidence of deposit and rent payments, the date of the letting, and the terms of the tenancy, including the rental period and the notice required to terminate the tenancy. This will have advantages for both landlord and tenant and should help avoid disputes. Effectively, the rent book will serve many of the purposes of a written letting agreement. It will also facilitate tenants claiming supplementary welfare allowance and tenants aged over 55 years claiming tax relief on rent paid.
At present, regulations made under section 26 of the Housing (Private Rented Dwellings) Act, 1982, prescribe minimum standards for formerly rent controlled dwellings on a national basis. In addition, many local authorities have made by-laws under section 70 of the Housing Act, 1966, laying down standards for private rented dwellings in their areas. However, these by-laws are not uniform and they are generally lower than the standards applicable to the formerly controlled sector. It is evident, therefore, that the position in relation to the control of standards is unsatisfactory. Accordingly, it is proposed to replace the existing provisions with section 18, which allows for the introduction, by way of regulations, of a new uniform set of minimum standards for privately let dwellings. Local authorities will have the full powers of enforcement of the statutory standards that they have under existing legislation.
Distress is an ancient common law remedy which entitles a landlord of rented property, without recourse to the courts, to seize the goods of a tenant to enforce payment of rent. I am satisfied that this type of procedure has no place in a modern legal code relating to rented dwellings. Accordingly, section 19 prohibits the use of distress in the case of residential lettings. In fairness to landlords, I must say that distress has been used in only very few instances in recent times. However, in future it will be clear to any landlord taking heavy-handed action of this nature that he does not have the sanction of the law. This section will have no effect in relation to commercial lettings.
Section 20 will make it possible by regulation to require the registration of rented dwellings generally or particular classes of such dwellings.
Taken together, sections 16 to 20 will constitute an important charter of rights for private tenants. There is sufficient flexibility to direct attention at particular areas, avoiding an overly regulated approach that would not serve either landlord or tenant interests.
The provisions in the Bill relating to the introduction of rent books, standards and registration will replace sections 25, 26 and 24 respectively of the Housing (Private Rented Dwellings) Act, 1982, which have only been brought into effect in the formerly rent controlled sector. There would be practical difficulties in seeking to regulate the private rented sector as a whole under those sections since they make no provision to exempt, for example, mobile homes or to other temporary letting arrangements which clearly should not be subject to them. The corresponding provisions in the Bill will overcome these shortcomings and contain other improvements to make them more effective overall.
As well as section 70 of the 1966 Act, section 114 of that Act is also being repealed. This stipulates that lettings with a rent of under £130 per annum contain an implied liability on the part of the landlord as to the habitability of the accommodation. The section has effectively had no application for many years and there is little point in leaving it in the Statute Book, particularly in view of the comprehensive provisions as to standards and lettings in the Bill.
When these provisions are brought into force, my Department will prepare and circulate a handbook which will act as a layman's guide to the landlord and tenant code as it affects residential lettings. This should ensure that tenants are well informed of their rights and obligations.
Since the explanatory memorandum explains every section of the Bill in some detail, I will confine my remaining remarks to a few of the other measures that warrant special mention.
The major emphasis in the overall programme for the accommodation of travelling people has, in recent times, been on the provision of additional residential caravan sites. However, progress in the provision of sites has often been poor, frequently because of opposition from the settled community to the location of sites. A factor in this has been the tendency for some travellers to continue to remain parked on the roadside in proximity to serviced sites that have been provided for them. In a effort to deal with the problem section 10 provides that where a caravan is parked within two miles of an official halting site the local authority may serve notice on the owner of the caravan requiring him to move it in to the site, if there is a suitable space for it. Failure to comply with this notice will constitute an offence and allow the authority to take direct action to relocate the caravan in to the site. If they are prevented from doing so, they may take it to a place of storage from where it may later be reclaimed by the owner.
Lest there be any doubts about it, I want to make it absolutely clear that this provision is very much pro rather than anti traveller. The basic objective is to ensure that housing authorities are equipped with the necessary powers to deal with a problem that is having an adverse affect on their settlement programmes to the detriment of travellers generally.
The Building Societies Act, 1989, gives the Minister power to regulate the securitisation by building societies of residential mortgages — that is the transfer of the mortgage to another party. In such an event the primary concern would be to ensure that the borrowers' interests are protected. Section 13 of this Bill will extend this power to regulate securitisation of residential mortgages held by all mortgage lenders. The need for the consent of the borrower is central to this provision. Section 14 deals specifically with the disposal of public sector mortgages and the use of the proceeds of such disposals.
Section 15 provides a means of transferring the debt of local authorities on foot of past housing loans from the Exchequer to the Housing Finance Agency, thus bringing it into line with current practice under which all new borrowing by local authorities for housing loan purposes is funded by the Housing Finance Agency. In this way, local authority debt on housing loans could be rationalised and centralised with one source.
I should emphasise that no proposals to dispose of publicly funded housing mortgages or to transfer local authority debt exist at present. Sections 14 and 15 are merely enabling provisions that remove existing legal obstacles and make it possible for these options to be considered in the future.
Documentation in connection with assistance given by my Department or the local authorities in the form of loans or grants, and so on usually contains a clause disclaming any liability in respect of the fitness for habitation of the houses concerned. However, there is legal opinion that these clauses would require statutory backing to be fully effective. In addition, a number of the new measures in the Bill, for instance shared ownership and the rental subsidy, will introduce new forms of assistance where it would not be appropriate that public authorities should carry a liability purely on account of being providers of funds. Accordingly, section 22 provides that the granting of assistance in respect of a house shall imply no warranty on the part of the Minister or the housing authority as to the fitness of the house. This does not, of course, affect any liability that may be held to arise out of negligence.
Section 23 assigns all the various housing functions, including the new functions under this Bill, to local authorities in accordance with current practice. This means that county councils and county borough corporations will discharge all the housing functions in their own areas. In addition to these functions county councils will perform a range of functions in respect of urban areas within their boundaries such as preparation of estimates of housing requirements and the operation of the voluntary housing and shared ownership schemes. As in the case of the Local Government Act, 1991, this section also enables the Minister, in the future, to transfer functions between housing authorities where he considers that they could be performed more effectively as a result.
Section 29 expands the powers of the Housing Finance Agency by enabling them to lend to housing authorities and The National Building Agency Limited for any of their housing functions. At present, the Housing Finance Agency may only lend to housing authorities for the purposes of loans or grants for the provision or improvement of houses. They will now play a more comprehensive funding role, particularly in relation to new measures contained in the Bill such as shared ownership. The Housing Finance Agency's borrowing limit is being increased from £1 billion to £1.5 billion. Their power to advance loans direct to the public is being discontinued as they have not engaged in this type of lending since their restructuring in 1986.
The Bill recognises that the delivery of housing services is essentially a local responsibility consonant with the Government's general policy of devolving as much power as possible to local government. Housing authorities are being given responsibility for the operation of all the new schemes of assistance being provided for in the Bill. With its enactment authorities will have at their disposal an extensive range of options for tackling social housing needs.
This in turn implies significant changes in the traditional role of local authorities in the housing sphere. For the future, this role will be broader, more imaginative and more flexible. Local authorities must no longer see themselves merely as direct providers of housing for rent — they must actively promote and facilitate the provision of social housing in all its forms. It is essential that the elected members, management and staff of local authorities appreciate and adapt quickly to this change of role.
From the foregoing it will be obvious to Deputies that the Bill is a significant and wide ranging measure. The desirability of securing its passage as quickly as possible will be obvious in view of the many aspects of housing which it addresses. I look forward to hearing the views of Deputies and I will be prepared to consider any well-founded suggestions for improving the Bill, as we all have a common interest in ensuring that, when passed, it will fully meet its objectives.
I realise that in a debate like this, the temptation will be there to suggest that all these problems will be solved by providing more finance. This matter will be debated in the course of our consideration of all these matters. There is no question about the determination of the Minister for the Environment to seek all possible resources required in these areas. It will also be clear that the proposed changes are desirable and would have to take place even if there were unlimited financial resources available in terms of new house building programmes. The experiences of the past with regard to social segregation and all the other problems that develop from building programmes of that kind are there to be seen and we have to respond to them. It is crucially important, whatever differences in approach we might have, that we determine to solve these problems with a different mix of solutions. That is clearly the right road.
Many other suggestions and proposals may be advanced to be added to the measures contained in this plan. I want to be as open, flexible and fair vis-à-vis these proposals as I can and I earnestly ask Deputies to approach the provisions of this Bill, with a positive attitude, recognising the social change in the housing character as one requiring the proposals we advance. I look forward to hearing from all Members in the debate and to the passage of this Bill, its subsequent enactment and the most positive response possible by local authority members.
I commend the Bill to the House.