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Dáil Éireann debate -
Tuesday, 9 Jun 1998

Vol. 492 No. 1

Urban Renewal Bill, 1998: Second Stage (Resumed).

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

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.

I confess I have ambivalent feelings about this Bill. I welcome its intention but the Bill is one of the sloppiest pieces of drafting I have ever seen. It is a masterpiece of uncertainty. There is no clarity about it. It is a piece of ad hockery which is not worthy of the name Bill. I predict it will cause problems for Ministers for the Environment in future years because it does not set out any basis that can be seized, understood, predicted or analysed——

That is the intention.

——for making decisions on the applications for tax reliefs. This Bill sets up a system, the worth of which is not in question, the success of which has been proven, following ten years of ad hockery on a new ad hoc basis and runs a serious risk of being challenged by some aggrieved local authority or individual who wants to construct in an area or involve himself in economic, infrastructural, social, employment improvements and so on in an area that has not been designated.

I welcome the intention of the Bill which gives effect to a number of things which were set in train by the rainbow coalition Government and by my good friend and colleague, Deputy Howlin, when Minister for the Environment. That so much of this Bill relates back to the provisions of the Taxes Consolidation Act, 1997, is an eloquent demonstration that something of this kind was in train and well on track before this. It has come to a form of fruition now. There would be no point in saying we will throw out this Bill but I hope the Minister will think again before Committee Stage and bring forward some amendments — I intend to propose some — that will give to this Bill, what should be one of the primary features of legislation of any kind and particularly legislation dealing with tax and development, clarity, certainty and predictability as to its effect and where the effect will take place.

This Bill has been eagerly awaited. Having read it and listened to the Minister I still do not know what to expect. It provides for the preparation of integrated area plans by local authorities, envisages plans that might cover part of the area of more than one local authority, provides for recommendations to be made in respect of qualifying areas for the purpose of urban renewal tax reliefs and so on but does not give any idea of how widely these urban renewal tax reliefs will apply. We are told 78 integrated area plans have been drawn up and submitted because this process has been going on for some time. It was expected that about 50 would have been submitted. Perhaps the Minister will tell us if there are more to come. Nobody knows how many will give rise to tax reliefs in any areas that are proposed for designation.

I do not know how many of the 78 plans, drawn up and submitted, include a recommendation for an area or areas for the purposes of the tax reliefs. When replying to the debate perhaps the Minister will tell us. I have absolutely no doubt that whatever the number is, it will be more than will be finally decided as qualifying for these tax reliefs.

The Minister for the Environment and Local Government and the Minister for Finance will have fun. In this House and outside they will jointly have fun when it comes to explaining why areas proposed for designation are not designated. The Bill does not give us any means of understanding how or why the Ministers will make a decision. It does not require either of the two Ministers to give any explanation or any reason for any decisions they might make, whether to grant the designated status.

The Minister of State, Deputy Molloy, has been in the House longer than I. He was in this House and I was outside on an occasion in, I think, 1968 when a Bill was found to be unconstitutional because it left far too wide a margin of decision for the Minister in question. I am referring to the Livestock Marts Bill, 1968, and the then Minister for Agriculture was the late Deputy Neil Blaney. He produced this Bill which appeared to everybody to be reasonable but it was challenged on the basis that there was nothing in it that required the Minister to act in a particular way in response to a given set of circumstances. The courts found that he had too wide a latitude in a matter that was of economic importance to the people who would apply for these livestock marts licences. The Bill was declared to be unconstitutional.

I do not know if the same fate awaits this Bill but I find nothing in it that allows anybody outside the offices of the Minister for the Environment and Local Government and the Minister for Finance to know what will be the effect of it. All the criteria written into the Bill, and all the jargon the consultants have produced, count for nothing.

I smiled when I heard the Minister of State outline some of the findings of the consultants. He stated: "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". I invite the Minister to take a walk some day in Neilstown, Rowlagh or Cabra because people living in those areas will tell him about their quality of life far more pithily than these consultants. That is what was in the mind of Brendan Behan's father when he was reported to have said, on being told they were allocated a house in the then new housing estate of Crumlin, that he did not want to move there because "they ate their young out there". It did not cost him £300 per hour to come up with that piece of insight.

The Minister of State is being very casual about all of this. In his concluding remarks he said, in a somewhat throwaway fashion, that widespread and extensive designation would defeat the whole purpose of the new scheme. If everybody is privileged then nobody is privileged, but where does one draw the line? Where will the line be drawn between the advantages to be given by the designated status in the Bill and the areas where that will not apply? That was the core of this Bill, along with the Dublin Docklands Development Authority, the "treble DA" as the Minister calls it. That sounds like a radio station somewhere in the United States.

The core of the Bill is the tax provisions. The integrated area plans will count for nothing where there is not designation because the Bill even provides for local authority staff to monitor the progress of those plans. What will they monitor? They have to produce written reports for the Minister, but do they have any powers? For example, in the year 2000, will they write to the Minister stating that he introduced an integrated area plan in 1998 and was good enough to designate part of an area for tax reliefs but that in every area, except where tax reliefs apply, the integrated area plan came to nothing because they were not given the necessary power or resources to do anything? Will they recommend that the integrated area programme they submitted to the Minister in 1998 should be discontinued because they cannot implement it? It is nonsense to provide for that type of measure in legislation unless it has some meaning. It does not have any meaning in this case. The Bill is concerned only with the designation of urban areas for the tax reliefs provided and the Dublin Docklands Development Authority.

Some difficulty will arise in figuring out what happens to recommendations. Recommendations in respect of designation will first have to go to the Minister for the Environment and Local Government. That Minister has to decide which recommendation to follow up. That Minister has to decide which of these proposals he or she will recommend to the Minister for Finance. The Minister for Finance then has to decide which of these meritorious applications, sponsored by the Minister for the Environment and Local Government, will be given effect. The Minister for the Environment and Local Government — I am sure the Minister of State, Deputy Molloy, will be of this mind also — will want as many of these proposals as possible to succeed. The Minister for Finance, on the other hand, will be concerned about the erosion of the tax base. Regardless of how friendly they may be, they will not agree on this matter. Which of them will win? What will happen if the Minister for Finance chooses certain proposals and rejects the others? The Minister for Finance may explain it to the Minister for the Environment and Local Government, but who will explain it to the public? Who will explain it to the local authority that made the recommendation or to the people who would like to be involved in development in what was proposed to be a designated area? I do not know the answer to that question and the Bill does not tell us.

It is as clear as daylight who will inform them.

It is not clear because each Minister for the Environment and each Minister for Finance who operates the Bill will be making an arbitrary decision. Unless all of the proposed designations are given effect in accordance with the criteria in the Bill, the Ministers will choose them and they will have to have regard to criteria other than those set out in the Bill.

Specifically, Ministers will have regard to the amount of tax expenditure included in this measure. The Minister for Finance will want to reduce the erosion of the tax base and the Minister for the Environment will want to increase it, and no amount of waffle and fancy footwork in the Bill will change that. It does not mean anything.

There is a great deal of work still to be done. That applies to Dublin, apart from the docklands area. It applies to the cities of Cork, Limerick, Galway and Waterford. What are the chances that recommendations in respect of designations will be accepted in those cities? If they are accepted, how extensive will they be? It does not stop with those cities. Any Member in this House could name any number of towns where there are substantial redevelopment needs — Sligo, Wexford, Ennis, Naas, Mallow, Cobh, Thurles, Tipperary, Athlone or Mullingar. There is not one town where a good case cannot be made for redevelopment of part of the town.

I amused myself last night by putting the names of even smaller towns in alphabetical order. I came up with Athy, Ballyhaunis, Carndonagh, Dungarvan and so on. All of these towns will produce meritorious cases. This measure could be applied to umpteen towns around the country with populations of 6,000 or more. Why was the figure of 6,000 chosen? Why not 7,000 or 5,000? Somebody decided that 6,000 was the magical threshold but we were told if it causes a problem it could be more or less than that, but 6,000 is a general guideline. That is not the way to legislate.

Other strange things have happened. In my own county of Kildare, for example, the local authority was given to understand that it should propose three towns for designation and, if it did, one of them would be likely to be accepted. In a commendable exercise of their wisdom and judgment, the members of Kildare County Council unanimously decided that they would propose the towns of Kilcock, Kildare and Athy. In addition, they said that in their view, and taking account of the development needs of the county, they would like Athy to be the town that is designated.

That was a wise and commendable decision and I understand something similar happened in other counties. However, they do not know what the result will be and there is nothing in the Bill to indicate any means of discerning it. They would be as well off doing what the Romans did — killing a chicken and examining its entrails — to try to find out the result as they would be examining this Bill. There is nothing in it which states whether the Minister for the Environment and Local Government will accept the recommendations and, if he were to do so, whether the Minister for Finance will agree to them. Neither does it state whether, if both agreed to them, there would be too many to which they would have agreed for matters to proceed. The Minister stated that if everyone is privileged then no one is privileged. We do not know what the result will be. The Bill should be redrafted to become legislation worthy of the name in that it would set out clearly to do something and say how it would be done. It does not do that, nor I do not expect that to happen.

If the Minster introduced the Bill and the palaver of Second, Committee and other Stages was proceeded with, what would happen if either House had the temerity to change anything? What would happen if a substantial change were made to section 7 which details what the integrated area plans should contain? If such changes were made as a result of the Minister having a rush of blood to the head and accepting Opposition amendments, would that make all the 78 plans submitted so far ineligible for consideration? Would it mean we would have to start again? What would happen if the House decided to change the dates in section 2? We are being invited to debate a Bill concerning a scheme already up and running and about which certain substantial decisions have already been made. The Minister hopes we will agree to the Bill and he commends it to the House. However, if we change anything, it will create a headache for him because it would undo a great deal. That is no way to run a railway. That is not legislation as it should be practised.

There is another area the Bill does not clarify. Does the Minister intend to give any guidelines, directions or suggestions about the balance between commercial and residential development in the integrated area plans envisaged in the Bill? I am not familiar with the 78 plans submitted so far so I do not know what the balance is in these plans. The Minister might be tempted to tell me that it is a matter for the local authorities or the companies which prepare these plans, that he will give free rein to local autonomy in this matter — something I have always argued for — and he would be entitled to say that. However, that will not wash. What emerges clearly from the report on the past ten years of designation is that commercial development is by far the most attractive form. After that comes residential development in the form of blocks of modest apartments.

The results of that can be seen in a number of towns and cities around the country. Many of the apartments which have been built in towns which have benefited from this kind of tax relief are of a kind — and I will be as delicate as I can in describing them — which are suitable for occupation by people on local authority housing lists, both lone parent and two parent families, and who receive rent allowances from their local health boards. Those people need accommodation and I am always delighted they can get it. However, urban renewal tax reliefs, where they are granted — I would like the Minister to explain the section 23 matter more clearly — should not be mainly concentrated, either by accident or design, on providing a halfway house type of accommodation to deal with local authority housing problems. That is what many of the residential developments involved are or have become.

While there is a place and a need for that type of development which may be interfered with by action taken on foot of the Bacon report, in practice it means there are areas in a number of towns which are inhabited substantially by — again I pick my words carefully — a transient population of people who are living there but do not want to be there and would rather be somewhere else but for the fact that it is the only accommodation accessible to them. That is not fair to them or their neighbours. The centres of towns should be occupied by people who have a need to be there, such as elderly people, retired people, people with mobility impairments, because they need to be near the facilities of a town more than they need the peace, tranquillity and isolation of the countryside. The centres of towns should also be inhabited by people who want to live near their place of work or business. It is time to rethink the kind of residential development which should be stimulated by these tax reliefs.

That applies particularly to city centre areas for the reasons I have stated and for another reason. We should aim to stimulate the development of residential accommodation in city centre areas for people across the income bracket. That should be done to counteract or offset in part the daily mass migration from the peripheries into the centre in the morning and from the centre to the peripheries in the evening. It would redress the balance by having people living in the centre and working at the periphery so that some kind of efficiency in the use of public transport and road space could be obtained.

That should be foremost in our minds when we examine developments such as the Dublin docklands development. I am not familiar with what is being proposed in the docklands but I would lay £1,000 to a hayseed, as a former colleague of mine and Deputy Howlin's used to say, that it will be mostly commercial. I believe it should be mostly residential.

And high rise.

It should be higher than what exists at the moment and it should be for a mix of income brackets. We should avoid the ghettoisation of the docklands for any group, privileged or underprivileged.

It is not just a problem in Dublin. Many Members have experience of gridlock in Cork, Limerick, Galway, Waterford and Wexford, not to speak of Enniscorthy and Gorey. Congestion is a problem in every major city and town and in every town which has not been by-passed and through which a trunk road is routed. I have spent a half hour getting from one side of Mitchelstown to the other, even using the rat run recently elevated to the status of an official diversion. Such congestion arises because there are huge volumes of traffic and people on the move and because we do not have an urban development policy which focuses on the problem. We now have an Urban Renewal Bill which does not seem to recognise that the problem exists.

Regarding the Dublin Docklands Development Authority, the Bill envisages modifications to the master plan prepared by the authority as long as they are not "modifications which would substantially alter the nature of the plan". I do not understand why we should be so restrictive. If the nature of the plan can be substantially altered to make it more people friendly and traffic friendly, why not alter it? If it can be altered under the breadth of a flawed inspiration such as this Bill, we should go ahead and alter it. What is so special about it that it should be immutable? I will mention something which is not in the Bill but which could have a substantial bearing on the success of the enterprise of which the Bill is a part. This Bill is designed to assist in the renewal of urban areas — cities, towns and villages. Other developments are being planned which might go in the opposite direction. My understanding is that up to recently the Minister of State intended to put a cap on the size of large shopping centre developments, particularly supermarkets. I understand that he had in mind a cap in the nature of 4,000 square metres gross area or 3,000 square metres net area. However, my information is that certain developers have been whispering in the Taoiseach's ear and he seems to be disposed towards taking a bigger view and allowing even bigger superstores on the edges of towns and cities. That would be a great mistake which would go against the intentions of this Bill. If we allow superstores to be built on the edges of towns they will suck business out of the towns and no amount of integrated area plans will be able to withstand that process. The Minister of State should take courage, ignore the siren songs of those trying to change the Taoiseach's mind and announce a maximum 4,000 square metres size for out of town superstores.

An announcement has been made on this matter today.

What is the cap?

The Deputy will be informed of that.

The Minister of State does not know.

Does the Deputy know what the cap is?

Is it a secret? Is it 4,000 square metres?

The Deputy should make his speech.

Does the Minister of State know? I would be delighted to find that he has specified either the size I mentioned or something lower.

Mr. Hayes

An instant response.

I am delighted the Minister of State listened to my statement last night and responded so quickly.

The decision was made last week.

The Minister of State can see in Galway that large shopping centres create major traffic problems at times when people like to shop — late opening evenings Thursdays and Fridays and Saturdays are also good. I have sat in heavy traffic at roundabouts in Galway trying the get to Connemara when everyone in Galway seems to want to do their shopping. We have an opportunity to modify and curb this process and prevent it happening in new areas. I would be delighted to find that the Minister of State has done something which has that effect. I will not be the first to congratulate him as he has not yet told me. However, when I hear it I will do so if it is right.

The Minister of State referred to measures being taken to protect our architectural heritage and I am delighted that such measures are being taken. I hope this will see the end of a process which has been taking place. Up to now the worst thing one could do if one owned a property with a heritage building was to try to preserve it. If one owned such a property the best thing to do was to let it decay and not be disturbed. If the building became dangerous enough the Office of Public Works might do something about it. However, if the owner tried to preserve the property the Office of Public Works would be down like a ton of bricks demanding perfection. I hope that the measures mentioned by the Minister of State will involve a more sensible approach.

I will begin on a more positive note than Deputy Dukes. It may be a result of my time as Minister for the Environment but I am a fan of the concept of urban renewal and I will make some detailed comments on the Bill.

I preface my remarks by signalling my support for urban renewal. The history of urban renewal schemes is a story of success. One can look at the various models piloted in Dublin. The Custom House Docks and Temple Bar are two different types of development which were under the wing of the Department. There are also the various urban renewal schemes which have transformed areas up and down the country. When people reflect on the decay which characterised the heart of many towns ten years ago they cannot but applaud the rejuvenation and the new spirit which has come with urban renewal and the schemes put in place.

Not all schemes have been equally successful. Some dreadful decisions have been made. I have seen some towns in which it was decided to abandon the run down urban heartland, designate a green field area and build a parallel town centre. Such decisions are bizarre.

The initial schemes were slow to take off. One needs some vibrancy in the economy and available investment resources for investors to take advantage of tax driven schemes such as this. One need look no further than Wexford. Anyone who has seen the 1798 commemorations in Wexford town or Enniscorthy will be flabbergasted at the transformation. Enniscorthy has a particularly beautiful location in the Slaney Valley. It has changed its perspective by developing areas that focus on the river when in the past most towns and cities focused away from rivers, the sea and natural amenities. Two new hotels have been built in Enniscorthy — one is a magnificent promenade by the river and the other regenerates an area which has been derelict for as long as I remember. It is almost as if these sorts of kick starts are contagious. One can see other people, even in non-designated areas, uplifting, building and transforming areas of decay into thriving commercial and domestic areas.

The concept has been good. However, it is timely to fundamentally reappraise it. We are in a vibrant period of investment and there is a great deal of money to be made in construction and the regeneration of urban dereliction for commercial usage or for private dwellings. I was told that a great number of the submissions made to me as Minister would not have been made without the carrot of designation but quite often, when the carrot was not forthcoming, the investment still happened and a handsome profit was made.

We should not continue the policies, successful though they have been. That is the reason Deputy McManus and I, when Minister of State with responsibility for urban renewal and Minister respectively, decided to commission a study of the urban renewal schemes to date. KPMG, in association with Murray O'Leary Associates and the Northern Ireland Economic Research Centre, was asked to look at the balance sheet to date and to give us pointers on how we should move forward and maintain the momentum for change at the least possible cost to the taxpayer but with the right effect. This Bill has its genesis in the comprehensive report made available to the Government in December 1996. It makes important reading. It details the reaction of those who have benefited from designation, analyses the economic inputs and indicates how we should move forward.

In the ten year period 1986-95 more than £1.75 billion was invested in the designated areas. Outside of Temple Bar and the Custom House Docks area, £515 million was invested in Dublin and £742.8 million throughout the rest of the country. This had a positive effect in terms of residential and commercial development.

The less positive views are contained in the chapters dealing with community development and the consequences for social development. The Minister of State said: "The objective now will be to ensure the benefits of urban renewal accrue to the many poorer communities in disadvantaged urban areas, not just to developers, investors and new residents". I am heartened by this. Many people have made money out of these schemes. This was necessary to bring our cities and towns back to life but I am not in favour of throwing apples into an orchard. We have to be careful in providing tax support for developers who are already doing well in the current economic climate. They do not need to be primed with taxpayer's money. I agree with Deputy Dukes that the proof of the pudding is in the eating but at least a close analysis is signalled. I welcome this.

It is stated on page 117 of the report that there is a high level of dissatisfaction among the representative community organisations with the consultation process to date. The following is stated on page 116:

It is the broad perspective of the organisations that the urban renewal schemes have failed to target the benefits of urban renewal towards local people. ..Since 1986 some urban communities in or adjacent to designated areas have experienced increasing long-term unemployment, escalating rates of crime and drug abuse and the alienation of young people in spite of the level of private sector investment attracted to the areas due to the availability of tax incentives. It is recognised that one must look beyond the tax based urban renewal schemes for the root of these problems and for solutions. This was the initial failure at the inception of the process to take account of the wider reality in which the urban renewal scheme initiatives were introduced. The stated objectives of the urban renewal schemes were to halt the decline in the physical fabric of our inner city areas by encouraging the private sector to undertake redevelopment schemes in these areas and to bring our inner cities back to life in terms of young people living in the city. These objectives have largely been achieved. However, the indigenous and adjacent communities feel that something is missing and that urban renewal, as defined by the incentive schemes, has not addressed issues which are central to the regeneration and sustainability of these areas such as employment, the lack of public amenities, education, training and youth development.

I am not as sceptical as Deputy Dukes yet but if that is where the Minister of State wants to go — he has clearly signalled that it is — not to prime already well primed pumps but to look at how social exclusion can be tackled, I wholeheartedly welcome it. I agree that in consultants' reports there is jargon which jars on most people's nerves — that if one hits the right buttons, all will be well in terms of social exclusion — but it is clear from the key conclusions listed in chapter 15 of the report that there is a need for an integrated strategic plan with an area based focus involving local communities with emphasis on employment, education, training and so on. These are covered in section 7(6) of the Bill. The local authorities have been informed that, if they wish to submit an integrated plan to the Department, these are the areas that are deemed to be of critical importance.

There are a number of deficiencies, to some of which I have contributed. For example, it was a mistake to give sole and exclusive responsibility to county councils and county boroughs. Although the scheme is confined to urban areas, many county councils have submitted their integrated development plans with minimal consultation with the urban areas affected. I am sorry I did not ensure there was a partnership approach with the county council as the lead agency. Often there are tensions and jealousy between county and urban authorities. The best product does not come from this. The role of urban authorities should have been stronger in the preparation of integrated development plans. I do not know if there is a means by which the Minister of State can require compulsory dialogue with the urban authorities affected whose imprimatur should be required before an integrated development plan is accepted and finalised.

The second deficiency lies in the objective of ensuring greater transparency in the designation of areas for urban renewal.

Deputy Dukes is correct; if one reads through the Bill, there is a semblance of all sorts of structures. It provides these are the matters that must be considered, this is the mechanism by which an integrated development plan is to be constructed, these are the dates by which it must be done, these are the channels through which it is to be submitted and it will be vetted by a panel. However, there is precious little transparency in the Bill because there is no constraint on the Minister for Finance and the Minister for the Environment and Local Government designating as they please. As long as they are considering the integrated plans, they can pick one or 70 of them. They can decide and the criterion which they apply to the selection process is known only to them.

The Minister of State informed us tonight that 78 integrated area plans have been received in the Department of the Environment and Local Government. That does not surprise me. I would have expected more because since the last scheme was closed up to 70 applications had been received in the Department from urban authorities seeking extensions of existing schemes or new areas to be included in a new scheme. Those applications have been on the shelf for a number of years.

I wish to deal with how the selection mechanism is to apply. Deputy Dukes stated there will be no transparency in it. From my reading of the Bill the Minister for the Environment and Local Government and the Minister for Finance will make that determination after due process, but there is no court of appeal and any urban area not included in the ministerial final selection has no criterion by which to judge itself against the successful candidates. That is the position at a time when the Minister for Education and Science is struggling to ensure there will be transparency in marking leaving certificate and junior certificate examinations and exam forms can be returned to students to show them where they made mistakes. The lack of transparency in decision making is a fundamental issue in the Bill. Decisions will be made by Ministers against a backdrop of criteria which are known only to the Ministers and in respect of which there is no court of appeal or mechanism for comparison. I regard that as something that does not move us forward from the criticisms of previous schemes that were said to be at the sole discretion of Ministers.

They were asked to make the decisions locally.

Yes, but that is not the point I am making. The decisions will be made locally and the Department will receive 78 submissions, but whether one, five, 25 or 70 of those——

The reason we have that number is that some local authorities did not choose to prioritise the town in which they wanted the IAP located. They submitted a number of towns and the Minister must now decide on the matter. The local authorities were asked to make that decision.

Ultimately there will be a selection process decided by the Ministers, but it will not be made against the backdrop of discernible criteria and it will not be done in a transparent way. The Minister of State might confound me by telling me about the way it will happen, but I would be surprised.

Another great criticism, and I referred to the report on the analysis and study of the urban renewal schemes to date, was the lack of local consultation. People believed those schemes were decided on high and that there was no consultation between local communities and even local authorities. Only a minimum amount of consultation with the public seems to be envisaged under Part II, section 7(7). Under that section local authorities may consult whomsoever they choose. There will not be a statutory requirement for a public consultation. In the area of planning there is a statutory requirement for display, consultation and amendment before anything can be finalised and that should be the way we proceed, but that is not true in the case of urban renewal. It can impact on a town as much as any development plan. A development plan by nature is aspirational, whereas an urban renewal scheme is a practical document. Often developers are keyed up and ready to proceed within the tight parameters of time for which the incentives apply. We should have paralleled the normal development plan procedure with a compulsory public consultation mechanism, but that is not in the Bill. There is a tokenism about public consultation, which is a major deficiency in the Bill.

I wish to refer to some comments by the Minister of State which caused me some concern. He mentioned the ongoing dialogue between the Department and the European Commission. Although it is not spelt out in any great detail, there is enough mention of it for me to be alarmed. The Minister of State signalled he might even have to come back to the House before the Bill is enacted to amend it if, as I read between the lines, the consultations do not go well. The Commission is considering the issue of tax incentives here, I presume in the context of our tiger economy, and, I take it, is anxious that aid to business is not contrary to European competition law. If that is the case, the Minister of State should be upfront with the House on this matter. When he or the Minister concludes Second Stage tomorrow, I would like to be given a clear exposition of exactly what is happening. I would like to know the views of the Commission on this and where the negotiations stand. Are the benefits we put in place for the Dublin Docklands Development Authority in any jeopardy? I regard it as one of the flagship Bills I had the privilege to bring before this House. The Minister and Deputy Dukes had some difficulty referring to it as the Dublin Docklands Development Authority or the DDDA. The Oireachtas put provision in the Bill for the authority to come up with its own name. We looked through a list of names to decide whether it would be called Docklands, Liffeyland or some other name that would be more user friendly than the DDDA. I hope that will happen in due course. I also hope that development, which will characterise the future of Dublin into the new millennium, will not be jeopardised by any ongoing discussions.

I wish to amplify another extremely important point. We should stop looking at development in isolation. We keep doing that in this country. We tend to think what is good for a town without considering it in the context of even the county. We tend to think what is good for our little area of the town. We look at microcosms, not the broader picture. We have no national spatial plan or development strategy in terms of urban development and growth. I am convinced that will be an extremely important concept to put in force, if we are not to be choked by our own success in the years to come. Dublin cannot continue to grow, like Topsy, and developers wishing to site here cannot do so without regard to infrastructural problems.

We do not have a national plan which outlines the urban growth centres over the next 20 or 25 years. We tried to produce one 25 years ago but it was not fixed in law. It is critically important that is now done. The legislation should be anchored by a national blueprint of spatial planning outlining the infrastructural growth for transport, water supply, sewage treatment etc., which will enable growth centres of X population to develop over the next ten or 15 years. Development, business and industry should be funnelled to those growth centres to allow the country and its regions thrive in a measured, structured manner rather than having some areas impoverished and others choking on unplanned overdevelopment.

In Dublin the traffic volumes envisaged by the DTI for 2005 were reached last year. What will happen when we reach 2005 if growth continues at 8 per cent? We must decide on a spatial plan. This involves taking broad based decisions which will be extremely important and discarding for a little while our parochial views on these matters. I say this with as much conviction as I can as it is an extremely important issue in the context of the Bill and the ongoing general review of planning.

I do not believe there should be wholesale redesignation in the context of advantage and helping areas. I know the 78 applicants will lobby the Minister and every Member and that all will expect to receive designation. There is nothing more attractive for a Minister than being able to deliver the goods by telling areas they have been redesignated. However, the more areas designated, the more the Exchequer is impoverished through tax foregone and the less impact the designation has as the same pool of investor money is being chased by different centres. Designation must be socially driven and integrated in a real sense and not simply aspirationally through paying lip service to the concept of an integrated social policy. It must involve the local community from the start in discussion and planning in a way not envisaged and not provided for in the Bill. Integrated development should look at the indigenous population and embrace the concepts of outreach and education. If the integrated plans achieve this they will do a wonderful job.

I am reminded of a former colleague, the cornerstone of whose address during a general election was that when he was elected to the House only 7 per cent of County Wexford was disadvantaged but that, after one term, he had ensured that nearly 20 per cent was disadvantaged. In most countries this would not be a great boast. However, the notion of extending disadvantage to bring in grants seems a positive attribute in Ireland. I hope the Minister will not go down the road of seeking to broad stroke the disadvantaged as much as possible to ensure everybody can claim some political credit while nobody receives any real benefit.

The Deputy is referring to a former Labour Party colleague.

I am not. I do not intend naming the individual. However, boasting about disadvantage struck me as an interesting concept.

I believe in the concept of urban renewal. It has a proud history of achievement, although there have been some flaws and failures. I support the plan which I and Deputy McManus as Minister of State commissioned which is the genesis and core of the Bill. I appeal to the Minister to take heed of the points and deficiencies I have alluded to and hope he will be willing and amenable to accepting amendments to the Bill on Committee Stage. Designation should be done in a transparent, narrow, focused manner to ensure the achievement of the social objectives which the Minister said in his speech are crucial to the next round of urban renewal.

I welcome the Bill. Like Deputy Howlin, I am a supporter of urban renewal. I congratulate Deputy Molloy on introducing the Bill and am very glad a legal framework is being provided for a new urban renewal scheme.

Urban renewal schemes were first introduced in 1986 in response to the increasing problem of dereliction and dilapidation in many major towns and cities. The main objective of the scheme was to promote urban renewal and redevelopment in towns by promoting investment by the private sector in the construction and reconstruction of buildings in designated areas. A further scheme was introduced in 1994. In my constituency a small portion of Ballinasloe was designated under the last scheme and I saw the development in that area. Urban renewal schemes have also benefited Galway city.

I am glad the Minister is talking about the designation of other areas, particularly areas of need. The schemes had a significant effect in addressing widespread dereliction and have led to the rejuvenation of areas which had fallen into decline or disuse. There is strong evidence to suggest the schemes led to significant growth in the economic activity of town centres and enhanced tourism. It is also clear that they contributed significantly to the atmosphere and confidence of designated areas.

Despite the success of the schemes, a high powered consultants' report highlighted that in terms of architecture there were mixed results while on the social side there has been less success in terms of benefit to local people. The new scheme envisaged in the Bill will feature a much more focused and integrated approach and will be underpinned by an objective to see physical renewal contributing to social renewal.

The Bill obliges local authorities — county councils, county boroughs and corporations — and authorised companies to prepare integrated area plans for socio-economic and physical renewal of urban areas. It is envisaged that drawing up these integrated area plans will involve widespread consultation at local level across a broad spectrum of interested groups. In my constituency Galway County Council has consulted widely, something I can give many examples of. Local authorities have been responsible for preparing overall plans, a very good idea as they know what is happening in each county. Application to the scheme of tax relief, catered for under the Taxes Consolidation Act, 1997, must be compliant with the terms of local plans which put a stronger emphasis than was previously the case on social and environmental impact. The Minister for the Environment and Local Government will be empowered under the Bill to make grants to the responsible local authorities or other bodies concerning conservation and renewal of buildings of artistic, architectural or historical interest.

The Bill also contains provision concerning the Dublin Docklands Development Authority. In a special incentive aimed at specific inner city renewal, a double tax allowance is to be provided for newly constructed or refurbished buildings in the Dublin docklands or similar qualifying area.

Debate adjourned.
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