Vol. 677 No. 4
33 Deputy Phil Hogan asked the Minister for the Environment, Heritage and Local Government if his Department is drawing up proposals for revenue-raising measures or reductions in expenditure arising from the review of financial measures recently announced by the Department of Finance; and if he will make a statement on the matter. [10330/09]
My Department is advancing the preparation of necessary legislation to give effect to a new charge to be levied by local authorities on non-principal private residences, as announced in budget 2009. It is expected the new Bill setting out the necessary legislative provisions will be introduced shortly and the Government's intention is to have it enacted as soon as possible thereafter. I expect this charge to make a significant contribution to local authority income in 2009.
The Government has already indicated, in light of the further deterioration in the public finances, that public expenditure provisions and revenue-increasing measures will be reviewed in the coming weeks with a view to adhering to the planned budget strategy for the current year. I am at present reviewing all my Department's expenditure programmes in consultation with the Minister for Finance. Pending the conclusion of these deliberations, it would be premature to anticipate the outcome of the review or the detail of any potential proposals that may emerge from it. However, there will of course be reductions. My intention is to rigorously assess all areas of current and capital spending with a view to prioritising those that support the maintenance of jobs, position the economy for recovery, address essential social objectives and support the achievement of key environmental compliance requirements.
The Minister for Finance has already indicated the timeframe within which the Government intends to complete the review now under way. It is open to the Opposition parties to respond to the recent invitation to put forward their own suggestions for addressing the critical economic and fiscal difficulties we face and we will give full consideration to any such proposals. In the meantime, as outlined, I will be assessing all expenditure and seeking greater efficiencies, and my Department will be consulting local authorities and the bodies under the aegis of the Department.
I assure the Minister that he has always received constructive suggestions from this side of the House. The leader of our party asked this morning for additional assistance and information regarding these matters before we can come to any conclusion. We will not have responsibility without power, and we will not have an input without information. The Minister cannot expect us to participate on that basis.
Would this not be a good time to dispose of the e-voting machines? This would result in a substantial saving. Nobody can understand why it is taking the Minister so long, after almost two years in office, to bite the bullet in this regard.
There has been a massive increase in applications for schemes such as housing aid for the elderly and housing adaptation grants since their introduction. Is it sustainable for the Department to continue these schemes without clearing the backlog? What proposals are there to clear that backlog? Finally, is the Minister in favour of introducing a property tax on principal private residences in the context of his proposals for the budget?
The concept of a property tax is being examined, as the Deputy knows, by the Commission on Taxation, which is due to report in September. We will consider all its proposals. It is investigating a range of proposals including a carbon tax and some form of property tax. We have been assured by the Minister for Finance that the carbon tax will be introduced but, again, it is premature to talk about the sort of property taxes, if any, that are being considered or that will be recommended. That does not preclude us, however, from going ahead with the €200 levy to which I referred in my reply. The legislation will be introduced and it will be a significant step forward in terms of broadening the revenue base for local authorities.
Applications for schemes such as housing aid for the elderly have increased, but, in terms of what local authorities can and cannot do, we are also looking at a substantial decrease in the number of planning applications, for example. Thus, I do not think there will be a problem with a backlog. The only problem will be whether we can sustain the investment from my Department over the current period or will need to make substantial cutbacks. In essence, the Deputy's question is about sustaining such services through capital investment. The frank answer is that under the current circumstances, of course we will have to make adjustments. There is no question about that. We will consider all aspects, including the question of the voting machines, which I am considering in detail. As I have said many times, I will be in a position to make a judgment on that as soon as I get the progress report.
The Minister is spending so much time considering this that the e-voting machines will have rotted away by the time the Minister has come to a conclusion. I do not know what the Minister is looking at——
Dust.
——but it beggars belief that it has taken so long.
The motor trade is going through a difficult period and that will have implications for funding. Has the Minister carried out an evaluation of the impact on the local government fund of the massive deterioration in the number of motor vehicles sold in 2009? How will we make up the shortfall?
The Deputy is right to point this out. A total of 85% of new vehicles purchased this year are in the low-CO2 category, which shows the success of that scheme and that it is having the desired effect. However, there has been a reduction in new car sales this year. Two thirds of the money going to local government comes from motor taxation, while one third comes from the Exchequer. My officials are investigating this. They are aware there is a shortfall due to the reduction in car sales and we are mindful that local government funding will be reduced as a result. That is simply a fact of life and we will have to consider alternatives. The way we fund local government, by relying on motor tax, is not sustainable either environmentally or economically. We must consider more sustainable forms of revenue, including the possibility of moving away from reliance on motor taxes and commercial rates. Instead we must consider possibilities such as those mentioned, including a tax on second properties. This should prove to be an enormous success and will, I hope, be the beginning of a new way of funding local government.
We will move on to Question No. 35 as Deputy Tuffy is not here.
Question No. 34 lapsed.
35 Deputy Phil Hogan asked the Minister for the Environment, Heritage and Local Government if he is satisfied with the financial position of the Dublin Docklands Development Authority; if he has expressed concerns regarding investments made by the DDDA; and if he will make a statement on the matter. [10331/09]
The authority was established in 1997 with the general duty to secure the social, economic and physical regeneration of the Dublin docklands area. Since its establishment, it has engaged in extensive business transactions involving the purchase, management, development and sale of lands in the area. The authority is self-financing, operating on the profits of its business dealings, and does not receive Exchequer subvention. Any liabilities incurred by the authority in the course of its activities are expected to be met from its own resources.
Under section 30 of the Dublin Docklands Development Authority Act 1997, the authority may, with the consent of the Minister for the Environment, Heritage and Local Government, given with the consent of the Minister for Finance, borrow money and in this regard may incur liabilities not exceeding €127 million. Any moneys borrowed and any interest accruing thereon may be secured on the revenue, funds or property of the authority. The authority has stated that it is fully solvent and in a position to meet all its liabilities for many years to come. I expect the authority's 2008 accounts, which will be submitted to me before the end of June, to show that the authority continues to be self-financing.
The Minister will be aware there has been substantial concern about the activities of the Dublin Docklands Development Authority for some time. These concerns include well known conflicts of interest, the deal done on the site of the former Irish Glass Bottle site and the fact that the authority could not or would not pay the interest on its loans in the second half of 2008, although it has since paid it. However, that a State body was not in a position to or did not wish to pay a portion of the interest due on a sizeable loan is certainly disquieting.
Has the Minister inquired into the matters raised with the Oireachtas Joint Committee on the Environment, Heritage and Local Government regarding the executive of the Dublin Docklands Development Authority and does he have concerns in respect of them?
The Deputy will be aware that a "Prime Time" programme was made on the Dublin Docklands Development Authority which referred to some of the issues he raised. I have appointed Mr. Gerry McCaughey, who has been described as a green entrepreneur, as the new chairperson to the authority . Mr. McCaughey understands the necessity of good regulation and I believe he will move the authority in the right direction and ensure that it operates to the highest standards. I have also appointed Ms Yvonne Farrell, an architect, to the board.
The authority made a significant and high profile joint venture investment in the acquisition of the Irish Glass Bottle site. I am very familiar with this site as I live close to it. The authority considered it necessary to become involved in the acquisition of this property because of its key location on the Poolbeg Peninsula and its significant development potential. It remains an important development asset and a long-term investment. The authority is satisfied that its interest in the property will, in due course, facilitate it in achieving its long-term objectives for the sustainable regeneration and development of the Poolbeg area and will bring substantial benefits in terms of high quality physical development and community gain.
The authority and its joint venture partners are in commercial negotiations with the relevant banks regarding the refinancing of the loan facility for the acquisition. This is in line with other commercial lending in current market conditions. Interest payments on the loan were suspended for a period but the authority has confirmed that all interest due to date has been paid. It has been informed that its joint venture partners are also fully up to date with their interest payments.
I am disappointed in the Minister's response because he did not indicate a sense of urgency in dealing with the problems that have arisen for the authority. Members were given assurances by the authority when it appeared before the Joint Committee on the Environment, Heritage and Local Government that the budgets for its education development and social regenerations programmes would be maintained. However, it appears that the committee was misled because I have evidence to suggest that cuts are being made to the programmes as we speak.
Was the new chairman of the authority, for whom I have the utmost respect, given terms of reference or ministerial instructions on addressing the problems that have emerged? Does the Department intend to commission an independent valuation of the site given that it cannot rely on the authority to carry out an independent valuation?
If the Deputy is familiar with the individual I have appointed, he will be aware of his rigour and his understanding of what is required of him. Mr. McCaughey has been fully briefed by my officials and the CEO of the authority, Mr. Moloney, on the potential for and difficulties with the site. I have no doubt that he will thoroughly investigate these matters and will come to his own conclusions. I understand he is at present considering legal and governance issues. These relatively complex issues will be addressed by Mr. McCaughey and the CEO of the authority.
36 Deputy Ciarán Lynch asked the Minister for the Environment, Heritage and Local Government if he will amend the Residential Tenancies Act 2004 to prevent licence agreements being used to circumvent the provisions of the Act; if he will undertake an immediate study to establish the extent of potential misuse of such agreements; and if he will make a statement on the matter. [10367/09]
I have recently announced my intention to review aspects of the Residential Tenancies Act 2004 with a view to considering the scope for further improvements to the legislative framework within which the Private Residential Tenancies Board operates. This would support the achievement of additional operational efficiencies by the board in the delivery of its functions. My Department is currently undertaking the necessary preparatory work for this review and I hope it will yield a preliminary outcome by autumn 2009.
The PRTB has not brought specific concerns to my attention in regard to the use of licensing arrangements as a mechanism for circumventing the provisions of the Act. Nevertheless, I will arrange for the issue to be considered as part of the review. As I indicated to Deputy Ciarán Lynch at a recent meeting to discuss issues around the operation of the Act, I would welcome any evidence that indicates the Act is the subject of abuse or circumvention in the manner outlined. I will ensure that such evidence is carefully examined in the course of the review.
My question for the Minister of State pertains to landlords' use of sham licences to deprive tenants of their rights and the PRTB of its jurisdiction. While certain renting arrangements fall outside the scope of the Act, some landlords use sham licences to circumvent their responsibilities. One such licensing arrangement which I have brought to the Minister of State's attention is advertised on the website of the Irish Property Owners' Association. I ask him the number of tenancies held under licence which should be with the PRTB and whether he agrees that sham licences are problematic in that they deprive tenants of their legal rights.
The PRTB faces an increasing burden of work because it must decide on cases involving contests to these licences. A number of instances have been documented whereby the board has had to decide on this issue. Does a licensed tenancy come within the board's dispute resolution remit and how often has it defeated licence agreements in the District Court? Although the Minister of State may claim the issue has not been brought to his attention, I am sure the PRTB will tell him that a significant problem has arisen. A coach and four can be driven through the legislation by landlords who want to deprive tenants of their rights.
In reviewing the operation of the 2004 Act, the PRTB considered the licensing arrangements but did not make a recommendation in this regard. Such issues are understood to be the subject of an insignificant proportion of the cases received by the board. It is, however, mindful of the need to ensure tenancy registration requirements are not avoided through licensing and other arrangements and will continue to adopt a robust approach to the matter.
On foot of the matter being brought to my attention, I have included the issue of licensing in the review. I will presently be in a position to sign off on the terms of reference of that review.
The notice posted on the website of the Irish Property Owners' Association has also been brought to my attention and officials of my Department have been in contact with the association. I am told that the notice was posted four years ago and will be reviewed. The association did not see a problem with the notice when it was posted.
Licences are applicable where a person stays in a hotel, hostel, guesthouse or digs, or shares a house with its owner under the rent-a-room scheme. The only exception to this is where a person stays in rented accommodation at the invitation of a tenant. If the tenant of the property is the owner's son and he invites others to live with him, some provisions of the Act will apply.
If the Deputy supplies evidence to suggest that provisions of the Act are being abused in a licensing arrangement, I will forward it to the PRTB. I have discussed at a recent meeting the issues he has raised today.
I certainly will forward such evidence to the Minister of State. He said the notice was posted four years ago. I printed this off at 2.25 p.m. so it is still being advertised as we speak.
Is the Minister of State aware of the knock-on consequences of these licence agreements? In Cork city, a tenant cannot obtain a parking permit if the landlord is not registered with the PRTB. Tenants cannot avail of many facilities as a result of arrangements under these licences.
We have just been debating the Electoral (Amendment) Bill. The issues of registration and accommodation also arise. The groups most affected by this are the most vulnerable in society, those moving from homelessness into accommodation, students with no experience as tenants and non-Irish citizens living in the State who are not familiar with Irish law. Clear abuse is taking place with tenants' rights being undermined.
Also, a number of landlords are undermining the Residential Tenancies Act 2004. I know of landlords doing so around the University College Cork area in Cork city. This is not a new issue, it has arisen since the Act was put in place in 2004.
The Deputy mentioned this at our meeting. A tenant has the authority to bring a case to the Private Residential Tenancy Board even if that person is not registered and the PRTB has the authority to act and has acted in such situations. There are two options open to anyone in this situation. He can direct evidence to me or to the Department and it will be dealt with and he is also entitled to go to the PRTB and it will act on the matter.
The Deputy has mentioned properties near University College Cork. We have no direct evidence but we have passed on the information, as we do with any evidence we get.
I take on board the Minister of State's commitment to resolve the issue but is he saying to me he is aware the PRTB has taken action on this? That would contradict the statement he made a couple of minutes ago that the issue has not been brought to his attention. Has it been brought to his attention or not?
I did not say it had not been brought to my attention.
By the PRTB, not by me.
The Deputy brought it to my attention himself in my office, so there is no question that the issue was not brought to my attention.
Was the Minister of State made aware of the situation by the PRTB?
I am aware that the PRTB acts on any issue brought to its attention. It does not consider this to be an issue but, having said that, I have decided to include a review of licences in the overall review of the legislation.
37 Deputy Phil Hogan asked the Minister for the Environment, Heritage and Local Government the budgetary situation in his Department; the amount allocated to capital projects in his Department for 2009; the amount spent to date on capital projects in his Department in 2009; if he will outline these projects and the projects likely to proceed in 2009; if he will allow local authorities to borrow to meet capital project targets; and if he will make a statement on the matter. [10332/09]
On publication of the public expenditure Estimates associated with Budget 2009 in October 2008, the Department's overall capital expenditure envelope amounted to €2.145 billion. Most of this funding related to capital expenditure grants for housing, infrastructural and other capital programmes, chiefly implemented by local authorities. At the end of February 2009, total capital expenditure by the Department amounted to €223 million.
This level of capital expenditure has continued to sustain important local authority capital programmes relating to social and affordable housing provision; continued expansion of investment in sewage treatment and water supply infrastructure; the provision of fire stations and public libraries; upgrading of waste recycling facilities; improvements to our national parks and other heritage improvements.
In the reply to an earlier question, I referred to the Government's preparation of a supplementary budget to ensure that the projected general Government deficit does not worsen in 2009. This can be expected to include a combination of expenditure adjustments and revenue raising measures. In line with the Government's continuing commitment to productive capital investment, the Department will continue to have sufficient capital resources to allow local authorities to meet their capital commitments arising in 2009, that capital projects underway will proceed as planned across all local authorities, and that our most critical investment priorities can be maintained.
The capacity to commence new capital projects will reflect the extent of capital provisions finally determined for the current year. I will review the priority needs of all programmes in deciding on the extent to which new commitments are entered into by the Department and by local authorities. I am acutely aware of the value of key infrastructural investment programmes in terms of employment creation and maintenance, economic recovery and social and environmental support. I intend to sustain these programmes to the highest level possible into the future.
It is normal practice for local authorities to supplement Exchequer capital grants with borrowing and I am aware of the wishes of councils to continue to avail of borrowing facilities in 2009. Local authority borrowing forms part of the overall general Government balance for national financial reporting. As part of the overall management of national borrowing levels, a limit also applies to local government sector borrowing. I will be addressing priority borrowing needs in the local government sector for 2009 in consultation with the local authorities over the next few weeks and I will facilitate urgent needs.
Many projects the Minister was intending to proceed with in 2009 will be not be possible because the funding is being cut and the development levies required for some of those projects at local authority level has dried up. Many local authorities face financial difficulties arising from those issues. How many new projects will go ahead in 2009? How many borrowing requests received by the Minister have been refused?
I will go through some of the issues raised by the Deputy. On a previous occasion Deputy Hogan asked about the housing capital programme. In broad terms, €1.4 billion of Exchequer capital funding is available for housing in 2009. We must work towards the fullest achievement of our broad range of housing objectives against the background of the significantly altered economic context. The approach must involve maintaining momentum in meeting social housing needs against a background of significantly increased pressures.
The 2009 provision of over €500 million will meet the ongoing commitments for some 150 schemes in progress under the water services investment programme and provide for continued investment under the rural water programme. Prudent management and profiling of the highest priorities will allow us to commence in 2009 on some new schemes and I will be examining the position closely in light of the final budgetary position which is currently being determined.
What about the borrowing requests?
When all of the requests for capital borrowing are taken together, they exceed €500 million but these are beyond the requirements for this year. I envisage being able to accommodate half of this in 2009 with the rest spread over 2010 and subsequent years. I am finalising my consultation with the councils and the determining priority must be that we see how labour intensive projects are.
We are heading for difficulties with the water framework directive. Can the Minister assure the House the provision he announced in the capital programme for 2009 for water and waste water services will be fully intact when the budgetary process is completed.?
I cannot give such an assurance because there was provision for a record amount of €560 million. We are looking at investment of over €500 million, which is still a substantial amount that represents an increase on last year. We have commitments related to the water framework directive and it is not just about compliance with our EU obligations, it is also a matter of putting in place infrastructure so we will be in a position to benefit from the recovery when it takes place.
