Almost one third of all poor households live in public housing in our five main cities. Secondly, there is evidence that residents of urban areas with high poverty concentrations experience cumulative disadvantage in terms of long-term unemployment, educational disadvantage and social isolation. Thirdly, the quality of life in areas of urban disadvantage is significantly inferior to that in more affluent areas in terms of crime levels, drugs, environmental conditions and socio-economic features such as access to banks and shops, local business activity and the provision of recreational amenities.
The Government's national anti-poverty strategy recognises that tackling poverty in Irish society cannot be left to social welfare mechanisms alone. Intervention across a wide cross-section of public policy measures is required. Disadvantage in urban areas is one of the five key themes of the anti-poverty strategy, with urban renewal identified as one of a number of policy actions which can contribute to achieving the objectives of the strategy.
It is critical, therefore, that urban renewal programmes for the future should identify the community gains arising from initiatives in this area, including measures to increase local employment, support the development of the local economy, and provide for social housing and environmental improvements.
After ten years' experience it was time to carry out a review, informed by an in-depth study, of the urban renewal schemes as they have operated up to now. Such a study was commissioned from a team of consultants consisting of KPMG, Murray O'Laoire Architects and the Northern Ireland Research Centre. The report from the consultants suggested that physical urban renewal can no longer be seen to operate in isolation. The delivery of wider economic and social benefits under the scheme in future would require a more focused, integrated strategy. The consultants stated that:
Urban renewal must address the physical, economic, social and environmental regeneration of urban areas having regard to the local situation, the overall situation and any individual conditions. As such, the diversity of issues urban renewal policy must address has led to the conclusion that, in the future, measures and programmes for renewal must be linked to area based, integrated strategic planning.
Taking account of the recommendations from the consultants the key elements in the new approach to urban renewal which the Government has adopted are as follows:
The new scheme will provide for a more targeted approach to the award of urban renewal incentives, both in terms of their scale and in the areas to which they will apply;
Under the new scheme designations for urban renewal will be based on the concept of integrated area plans, which will address not only issues of physical development such as appropriate use, quality of design and conservation, but will also cover wider issues of local socio-economic benefit, including training, education and social housing;
Integrated area plans will have to identify targeted, focused sub-areas for designation, justify the proposed designations by reference to the objectives of the plan and indicate the basis on which incentives are sought.
Shortly after the Government took office last year, I appointed an expert advisory panel to assist me in preparing for the new scheme. The panel's terms of reference included the provision of advice on guidelines for identifying priority areas for which plans should be prepared and on the suggested content of the plans.
The panel has also been asked to assess the extent to which completed plans comply with the guidelines with a view to making recommendations in relation to proposals for designation. Guidelines as finalised by the panel were subsequently issued to county councils and county borough corporations which were given responsibility for identifying and prioritising the most appropriate areas for which plans might be prepared, having regard to the criteria laid down in the guidelines.
The criteria for selection of areas for which plans should be prepared included relevant development plan policies and objectives, the extent of physical decay and social and economic disadvantage in the area, the need for incentives to support development in the area and the capacity to benefit from such incentives, together with the potential for synergy with other area-based plans and programmes.
On the important issue of the size of urban areas most likely to be suitable for consideration under the new scheme, the guidelines made the point that very few towns of less than 6,000 population had received designation under the schemes up to now and that such towns would be likely to have even greater difficulty qualifying under the criteria for the new scheme. This indicative population level has been the subject of much debate since the guidelines were issued.
The essential response I would make is that the guidelines did not seek to set a minimum population threshold, as such, for the new scheme. While the indicative population level mentioned does not equate to setting a strict population threshold, it reflects the fact that the scheme is concerned with urban renewal and that it must, therefore, of its nature, be confined to areas with strong urban characteristics. The indicative population level also reflects the fact that the successful implementation of a scheme of this nature in an urban area requires a minimum level of scale.
A number of requests to have the 6,000 population guideline reduced were received. The issue was considered by the expert advisory panel as part of its overall consideration of the guidelines for the new scheme. The panel's recommendation was that the 6,000 guideline should remain unchanged on the basis that while it is only a guideline, it provides a reasonable baseline indication of the minimum size of urban area likely to be able to meet the criteria for designation under the scheme.
The designation of an area for tax reliefs under the new scheme can only be considered if it falls within an urban area which the relevant local authority decides is a priority area for which an integrated area plan has been prepared. In that context, if a town with a population of less than 6,000 was considered to be a priority, the relevant local authority will, as in all other cases, have to demonstrate clearly how that area meets the criteria for the new scheme.
Turning to the content of integrated area plans, the guidelines for the new scheme make it clear that these plans should create a vision for the future of the area to which they relate which balances physical development, economic and community development, conservation and environmental and amenity improvements. Within core urban areas, in particular, conservation of the built environment is expected to underpin the strategy of any plan for such an area. The consultants' report on previous urban renewal schemes recognised that a number of excellent conservation initiatives had been undertaken in designated areas under the schemes operating up to now. The report found that it was in those areas where conservation objectives have focused on the reinforcement of the essential character of an area that they have been most effective.
However, in many designated areas the practice of conservation, according to the consultants, simply resulted in the gutting of buildings and the retention of facades. This may have been variously attributable to the difficulties of complying with statutory building and fire regulations, the misfit between new uses and old buildings or the widely cited problem of cost.
To facilitate reconstruction and improvement work on existing buildings, my Department has issued revised technical guidance on the national building regulations which took on board a number of suggestions from the Royal Institute of Architects in Ireland. The institute, in partnership with my Department, is currently working on a further special technical guidance document for work carried out on buildings of outstanding architectural and historical importance, including listed buildings.
The urban renewal scheme consultants also found there was a tendency to concentrate on the retention of isolated historical features and facades. They were of the view that there is a need to evaluate the total spatial, social and historical context of each building in a streetscape. That is why the guidelines on the 1998 urban renewal scheme, which issued to local authorities, specifically addressed the issue of conservation and set out a basis on which the problems highlighted by the consultants' report might be addressed, taking account of best practice in terms of both building and streetscape conservation.
The consultants' report also noted that, in the absence of a strategic policy on conservation at national level, it was not surprising there have been mixed results from conservation initiatives in designated areas. Happily, since the time that report was published, the Government has made significant progress on the overall issue of building conservation, particularly with the publication last month by my colleagues, the Minister for the Environment and Local Government, Deputy Dempsey, and the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera, of the Government's proposals, entitled "Protecting Our Architectural Heritage".
These proposals will deliver on a commitment in An Action Programme for the Millennium by putting in place three significant measures. The first of these consists of a proposed new planning Bill which will transform the legislative protection afforded to the architectural heritage. The Minister for Arts, Heritage, Gaeltacht and the Islands will also bring forward a Bill to place the National Inventory of Architectural Heritage on a statutory basis. The inventory will act as a crucial database in identifying buildings throughout the State which are worthy of protection.
Secondly, I am pleased that the Government has given approval for a new budget line of £5 million per annum from 1999 onwards to ensure that the package of measures can be fully implemented. Out of this, around £4 million will be available for grant aid for protected buildings. The remainder will go on the third measure: employment of the necessary conservation expertise to ensure that all buildings worthy of listing are identified, the legislation enforced and the grants scheme operated effectively. The employment of adequate expertise and knowledge by local authorities will be specifically supported with central guidance and support as necessary.
The new conservation measures being introduced by the Government will closely complement and help to underpin the approach to conservation required under the integrated area planned approach to urban renewal. There is strong emphasis in the guidelines for integrated area plans on preference for refurbishment of existing buildings for sustainable uses over new buildings. Plans are expected to show how incentives can be used to support investment in conservation and repair and adaptation to new use.
The Bill is directly linked with the provisions for tax reliefs for the new urban renewal scheme included in this year's Finance Act. Those reliefs cannot be applied until after the Oireachtas has passed a Bill providing for the renewal of certain urban areas and the submission of integrated area plans in respect of areas identified on the basis of criteria drawn up by the Minister for the Environment and Local Government.
The Bill is divided into four Parts. Part I is made up of mainly technical provisions dealing with matters such as the Bill's commencement and definition of terms used in the Bill. Part II deals with integrated area plans, including the functions of local bodies and the Minister in relation to these plans and deals with rates remissions. Part III clarifies and extends certain additional functions to the Dublin Docklands Development Authority, which was established under the provisions of the Dublin Docklands Development Authority Act, 1997. The opportunity is taken in Part IV to make specific statutory provision for the urban and village renewal grants which are made to local authorities and certain other conservation bodies under the urban and village renewal subprogramme of the EU co-financed Local Urban and Rural Development Operational Programme. A number of amendments to the Taxes Consolidation Act, 1997, are also provided for in Part IV. While these tax legislation provisions are included in this Bill the intention is to incorporate the provisions subsequently in the Taxes Consolidation Act via the 1999 Finance Bill.
Sections 1 to 6 deal respectively with the issues of the Bill's Short Title, various commencement provisions, interpretation of terms used in the Bill, the linking of the Bill with the relevant provisions in the Finance Act, the appointment of authorised companies for the purposes of the Bill's provisions and the payment of any expenses that may be incurred by the Minister in administering the Bill.
Section 7 provides for the drawing up by county councils and county borough corporations or companies authorised by them of integrated area plans, IAPs, for a part or parts of their areas for the purposes of the new urban renewal scheme, with provision for the inclusion of part of the area of another county council or corporation, with the consent of the latter. Section 7 also lists objectives which must or may be identified in an IAP. These objectives include securing the economic and social renewal of the area and its physical renewal with provision for addressing the various issues relevant to the renewal of the area. The section also requires consultation with a wide cross section of interests in the preparation of IAPs.
Section 8 provides for IAPs to contain or be accompanied by recommendations from local authorities or authorised companies that parts of the area to which the plan relates should qualify for tax incentives or, alternatively, that the whole of the area to which a plan relates may qualify for some of the residential incentives in certain circumstances. The provision allowing residential incentives to be applied throughout an area to which an IAP relates, where this can be justified, has been framed to take account of the recommendations in the Bacon report on house prices by confining this option to conversion or refurbishment of existing property in the case of section 23 type relief for rented residential accommodation and to residential property for owner occupation. Section 23 type relief for new rented accommodation could only be applied in subareas within an IAP area where this can be justified.
Section 8 goes on to provide that in recommending the application of incentives a local authority or authorised company must have regard to the following criteria: consistency between the types of development for which urban renewal reliefs are to be provided and relevant provisions of an integrated area plan; the significance of the reliefs to be provided in a qualifying area for overall development objectives of such a plan; market conditions in the area covered by the plan and the nature and extent of any impediments to the development of the type envisaged in the area in which the tax reliefs will apply.
Section 9 provides for the Minister for the Environment and Local Government, having considered an IAP, to make recommendations to the Minister for Finance that an area or areas within the area covered by an IAP should qualify for urban renewal incentives. Section 10 allows rating authorities to remit on a sliding scale over ten years the rates leviable on premises constructed or improved over a period to be specified, in an area covered by an IAP. It should be noted that this provision would allow rating authorities to grant rates remissions on this basis in any urban area covered by an IAP regardless of whether tax reliefs are applied in the particular case.
Section 11 provides that developments qualifying for the tax reliefs must be consistent with the objectives of the relevant IAP, with local authorities providing certificates to this effect. Section 12 covers the putting in place of arrangements for monitoring and reporting on the implementation of IAPs in cases where areas within the area covered by the plan become qualifying areas for the purposes of tax incentives.
In relation to the Dublin Docklands Development Authority, section 13 provides for the avoidance of doubt in response to legal advice given to the authority, that the DDDA may recommend to the Minister for Finance that one or more of the relevant incentives provided for in the Taxes Consolidation Act may be applied to qualifying areas in the docklands area. Section 14 provides that qualifying developments in docklands must be consistent with the master plan for that area and that this must be certified by the DDDA.
Provision has been made in section 15 to allow minor variations to the Dublin docklands master plan by the council of the DDDA to take account of any changed circumstances that may have arisen since the adoption of the plan without the need to invoke the full review procedure. Section 16 increases the present limit on borrowing by the authority from £50 million to £100 million to reflect the major investment to be undertaken by the authority in implementing the master plan.
Section 17 makes specific statutory provision for the grants payable under the urban and village renewal subprogramme of the Local Urban and Rural Development Operational Programme. Sections 18 and 19 contain the provisions which will be incorporated in the Taxes Consolidation Act at a later stage. Section 18 will have the effect that double rent allowances for lessees of buildings can apply irrespective of whether capital allowances were granted on the building. This is in line with the taxation provisions in relation to the new scheme under which the intention is that the Minister for Finance may direct that areas within the boundaries of an IAP shall be a qualifying area for the purposes of any one or more of the urban renewal tax incentives.
There have been ongoing consultations with the European Commission on the future applicability of the urban renewal tax incentives in the case of the Custom House Docks area. Arising from delays which have occurred in obtaining EU approval to an extension of the current deadline for the incentives and unexpected EU objections to certain aspects of the incentives as they have applied to development in the Custom House Docks area up to now, including double rent allowances in particular, it has become necessary to modify legislative provisions relating to the incentives in that area. The proposed modifications are provided for in section 19. Specifically, section 19 extends, from 1 May 1998 to 1 August 1998, the deadline in section 409A of the Taxes Consolidation Act, 1997, by which a contract for the development of a building in the Custom House Docks area must be entered into if it is not to be affected by the £25,000 ceiling which has been placed on the amount of capital allowances which a passive individual investor can offset against non-rental income in any given year.
Section 19 also provides for the following variations as between particular termination dates for the different tax reliefs in the area: 24 January 1999 for double rent allowances; 31 December 1999 for the residential reliefs; and 31 December 1999 for the capital allowances for the construction of commercial buildings. However, where at least 51 per cent of the qualifying expenditure is incurred before 1 January 2000, the capital allowances qualifying period will be extended to 30 June 2000. These changes will come into effect by way of an order to be made by the Minister for Finance.
It is important to note that the EU Commission also has to be notified about any aspects of the new urban renewal scheme regarded as constituting State aids to business, i.e. the tax allowances and rates relief for commercial and industrial development. Consultations have been taking place with the Commission about the extent to which, and the basis on which, EU approval may be forthcoming, in the context of the new regulations on regional aid published recently. Having regard to the Commission's particular difficulties with double rent reliefs and with rates remissions, the position emerging in the light of the continuing consultations with the Commission may require me to revisit some of the provisions of this Bill and the relevant tax legislation provisions during later stages of debate on the Bill.
The process of selecting areas and preparing IAPs has been ongoing since last year. The total number of IAPs received by my Department was 78 — well beyond the 50 or so we anticipated. Given that the urban renewal scheme applies in 35 urban centres and the well signalled intention that the new scheme will be targeted at the areas where needs are greatest it is clear there will have to be limitations on the extent to which designation can be applied under the new scheme. Widespread and extensive designation would defeat the whole purpose of the new scheme. However, until such time as all the IAPs have been fully assessed by the expert advisory panel and recommendations made to me, no decisions will be announced.
I commend the Bill to the House and look forward to a constructive debate on its provisions.