Dáil Éireann debate -
Wednesday, 21 Apr 2010

Vol. 707 No. 1

Adjournment Debate.

House Prices.

Deputy Terence Flanagan

I thank the Ceann Comhairle and his office for the opportunity to raise this important issue, namely, the urgent need for the Minister for Finance to introduce supports for first-time buyers who have entered into contracts to buy property based on prices during the property peak. These home owners bought properties based on plans and are now being forced, through contractual obligations, to honour these exorbitant prices. The reality, however, is that they are in great financial difficulty. Some are insolvent and are not in a position to honour these contracts. The Minister must look urgently at this issue.

Measures have been taken to date by the Government to help protect home owners in mortgage arrears. That is a separate piece of work currently being conducted. The Minister of State, Deputy Ciarán Cuffe, has been involved in this on a first-hand basis and he is to be congratulated for that. The sooner that group comes up with solutions to the difficult situation in which people themselves regarding mortgage arrears, the better.

The issue of these contracts was brought to my attention by several buyers in my constituency who have been made redundant. They were informed subsequently by developers that they must complete their contracts even though they are unable to pay for them. In many such cases, mortgage approval had expired already due to construction delays but developers continue to send letters demanding payment and imposing enormous interest penalties, despite having been told these buyers have no incomes or assets.

I am aware that these people entered willingly into these contracts but through unforeseen circumstances, such as job losses, they cannot honour them. Many of those affected have been forced into rental accommodation and are unable to apply for other forms of housing such as affordable housing. That is an important point. They cannot put themselves on the housing list while these debts hang over them. They must be released from their contracts.

I ask the Minister of State to look seriously at this issue. It is possible that up to a few hundred individuals may have been caught in this trap and it is important that the Government protect that group of buyers. Is any legislation pending in the area? NAMA has been introduced and will help certain developers but this group has been ignored and not even discussed in any communication to date. One of the possible solutions is for the Government to buy out some of these contracts at a discount to help these people.

With regard to the general housing policy, the Government has not delivered on promises in the programme for Government, particularly on the national development plan elements relating to affordable housing units. It is terrible that 1,100 properties are currently vacant and unoccupied, mainly because local authorities have not been in a position to sell them; if they sell the properties they do so at a loss because they were purchased at the peak of the property boom.

Over 100,000 people find themselves on lists for social housing in this country and cannot get into a property, which is bad. There is a glut of property, with over 345,000 empty units in the country, so there must be some kind of reconciliation between housing lists and the number of empty housing units. If the Government is serious about the issue it has a golden opportunity to name the price at which developers will sell the houses. It should avail of that opportunity.

I hope the Minister of State will take on board the points raised this evening, specifically those concerning the home owners who find themselves trapped having to honour contracts when they are not in a financial position to do so.

Minister of State at the Department of the Environment, Heritage and Local Government (Deputy Ciarán Cuffe)

I thank the Deputy for the opportunity to speak on this important matter. We are all aware that many Irish people place a high value on owning their own home and of the significant efforts they make to secure and retain their home. This Government is conscious of the high value placed on owning a home and it is our objective from both an economic and social policy point of view to assist those home owners who are in difficulty with mortgage arrears.

There have been a number of developments relating to the Government's commitments in the renewed programme for Government dealing with protecting the family home and helping those in debt. The Deputy will be aware that in February this year, the Minister for Finance informed the Government of his proposals regarding expanding the membership of the interdepartmental mortgage arrears group, under the chairmanship of Mr. Hugh Cooney. The revamped mortgage arrears and personal debt group's terms of reference, which were approved by the Minister, were incorporated into the supplementary documentation for the Minister’s statement on banking delivered to this House on 30 March 2010.

In general, the terms of reference reflect the commitments made by the Government both in the renewed programme for Government and in subsequent Government decisions relating to the issues of mortgage arrears and personal debt. The group has met on a number of occasions and will focus initially on bringing forward recommendations in dealing with mortgage arrears problems while later addressing the personal debt issue. The group will report and make recommendations to the Minister on a rolling basis and submit a final report to the Minister on the mortgage arrears issue by the end of June 2010.

The House will be familiar with the other supports available to protect home owners in difficulty. The Financial Regulator's code of conduct on mortgage arrears, which the Minister has spoken about extensively, requires lenders to wait at least 12 months from the time arrears first arise before applying to the courts to commence enforcement of any legal action on repossessions. The code applies to all regulated lenders on a statutory basis and applies only to mortgage lending activities to consumers in respect of their principal private residence. The main features of the code are early recognition of problems, active management of arrears problems, examination of alternative solutions and repossession as a last resort.

It is important to point out that historically, repossessions in Ireland have been low and a comparison of repossession figures for Irish Banking Federation members who are the mainstream lenders — not including sub-prime lenders — with figures from the UK Council of Mortgage Lenders indicates UK repossession rates per 100,000 mortgages at 30 times those in Ireland. For 2009, total repossessions of homes by legal process for those institutions covered under the bank guarantee scheme was only 28.

In addition to the code, a number of additional measures are in place. In the Minister's Budget Statement in December he refocused mortgage interest relief on those who bought their homes at the peak of the market. Where a home owner’s entitlement to mortgage interest relief would expire in 2010 or after, he or she will continue to receive it up to the end of 2017. The mortgage interest subsidy scheme under the supplementary welfare allowance system provides money, subject to a means test, towards the interest payments on a home mortgage. This scheme, which is administered by the community welfare service of the HSE on behalf of the Department of Social and Family Affairs, provides short-term support to help pay mortgage interest repayments where the mortgage relates to a person’s principal private residence. The number of people now benefiting from the scheme stands at over 15,000. The scheme is currently under review by the Department of Social and Family Affairs in order to examine ways of improving its operation.

The Government funds the Money Advice and Budgeting Service, which is providing valuable support for those in difficulty. MABS is the main Government-funded service which provides assistance to people who are over-indebted and need help and advice in coping with debt problems. People with debt-related problems should take early action and approach MABS for help and guidance. This can be the first positive step for people in addressing debt difficulties. A new debt protocol agreement has been finalised with MABS and the Irish Bankers Federation, IBF, which provides added reassurance for borrowers with the most difficult issues.

The Irish Bankers Federation, representing the mainstream lenders, published a statement of intent in November 2009 which provides further reassurance to home owners who find themselves genuinely unable to maintain repayments on their principal private residence. The statement of intent has been agreed and supported by all IBF members and is a welcome development. It is also welcome that the IBF oversight committee on the implementation of the statement of intent will also include a representation from the Money Advice and Budgeting Service.

It is also very important to remember that mortgage lending forms a very large part of the balance sheets of Irish financial institutions and mortgage-backed securities are a vital part of their funding activities. For these reasons, the quality of mortgage loans is highly important to the banks commercially. Markets and rating agencies are very sensitive to anything that might appear to damage the quality of the bank mortgage portfolios and this factor must be a prime concern as we consider how best we can assist mortgage borrowers.

We have gone through a very difficult correction in the property market and the Government is fully aware that this has proved hard for many home owners. The Government is confident that the recent measures taken by it, along with the existing supports I referred to, will assist those who are in difficulty with mortgage arrears as a result of unemployment and the economic downturn.

National Monuments.

Deputy Joe Costello

Like many people in the country, I have welcomed the decision to designate Nos. 14 to 18 Moore Street as a national monument. This happened after a long campaign initiated by the National Graves Association and which has been carried on since by the Save 16 Moore Street group. The intention was to save the last headquarters of the leaders of the 1916 Rising. That was No. 16 Moore Street but the adjoining buildings were deemed to be equally important, and Nos. 14 to 17 all played a significant part in the foundation of this State.

In March this year property developer Joe O'Reilly, who headed up a development consortium called the Carlton consortium, secured planning permission for the development of the Carlton cinema site in the heart of Dublin. He now has seven years to carry out the development but as many of us know, a number of Mr. O'Reilly's business loans with Irish banks have recently been scheduled for NAMA. I presume they will be transferred in the near future so there is a question over the capability of Mr. O'Reilly to carry out the development as approved.

The site for which the Carlton consortium has obtained planning permission includes most of the block at the upper half of O'Connell Street as it fronts to Henry Street, including Moore Street and O'Rahilly Parade, and then as it fronts to Parnell Street. It includes the national monument at Nos. 14 to 17 Moore Street, with permission granted for development subject to 31 conditions, some of which relate to the conversion of No. 16 Moore Street.

Others relate to the demolition of some of the surrounding buildings and to some of the fabric of No. 16 and Nos. 14 to 17 Moore Street. I find myself in agreement with the great-grandson of James Connolly, Jim Connolly Heron, who is a mainstay of the campaign to save Nos. 14 to 17 Moore Street and who stated that the planning application proposed the partial demolition of Nos. 14 to 17 Moore Street. The developer has been asked to include the 1916 elements in the development, which would highlight the retreat route from the GPO back to the houses in Moore Street. However, it appears as though the only part of the planning permission granted that relates to the commemoration of the 1916 Rising is the planned museum in No. 16 Moore Street, which the developer was originally obliged to provide anyway prior to the planning permission. Consequently, it appears as though the developer now plans to demolish the entire original fabric of the building, thereby leaving only the shell of Nos. 14 to 17 Moore Street, with the exception of No. 16. It appears as though we could end up with the shell of a national monument with the other surrounding yard areas totally demolished.

I believe the site from Nos. 14 to 17 should be developed by, or under the direct supervision of, bodies such as the National Museum, the Office of Public Works or the Heritage Council and in accordance with the recommendations of the Shaffrey report, which was commissioned by Dublin City Council and paid for by the people of Dublin. I ask the Minister of State to study the aforementioned report.

Approximately 30 years ago, we buried the Viking and medieval history of Dublin at Wood Quay. I hope we do not do the same with this site, which was pivotal to our own recent history and the foundation of the State. The centenary of the 1916 Rising is only six years away and it is time for the Minister for the Environment, Heritage and Local Government, Deputy Gormley, who has responsibility for national monuments to produce his plans for the two national monuments that are associated with the rising in the centre of Dublin, namely, the GPO and Moore Street. I hope to hear his plans for at least one of the aforementioned national monuments this evening.

Deputy Ciarán Cuffe

I thank Deputy Costello for raising this matter. As the Deputy is aware, in January 2007 the then Minister for the Environment, Heritage and Local Government placed a preservation order on Nos. 14 to 17 Moore Street under section 8 of the National Monuments Act 1930, as amended. The preservation order was made on the grounds that the buildings are a monument, the preservation of which is of national importance by reason of their historical importance as the final headquarters of the leaders of the 1916 Easter Rising. The objective of the preservation order is to protect the monument from any danger of being destroyed, injured or removed. The effect of a preservation order is that any works affecting these properties, including any excavation or ground disturbance within, around or in proximity to them, require the prior written consent of the Minister for the Environment, Heritage and Local Government under the National Monuments Acts. The Minister is statutorily obliged to consult with the director of the National Museum as part of the consent process. It is an offence for anyone to damage, injure, remove or carry out, or cause or permit, work affecting the monument without the Minister's written consent.

I am aware that An Bord Pleanála has made a decision to grant permission, with conditions, for a mixed development on this site that includes the national monument. This permission in no way supersedes the preservation order already in place and the consent of the Minister still will be required, in accordance with section 14 of the National Monuments Act 1930, for any works affecting the area covered by the order. While my Department currently is dealing with a consent application for minor works to protect and maintain the fabric of these buildings, to date no application for consent related to the proposed major development has been received.

The position is that notwithstanding the granting of planning permission, the protection in respect of Nos. 14 to 17 Moore Street as a national monument remains in place and unchanged. I fully appreciate the historical significance of these buildings as the site of the last military actions of the 1916 Rising leaders, namely, Pearse, Connolly, Plunkett and MacDermott and I took the opportunity to look at the exterior and rear of the buildings last St. Patrick's Day. The leaders' actions and self-sacrifice, the centenary of which will be upon us in less than six years, laid the foundations for the establishment of the Irish State. I assure the Deputy that the appropriateness of any proposed works will be examined carefully against that historical background if and when a development-related consent application is submitted to my Department.

Urban Renewal Projects.

Deputy Kieran O’Donnell

I thank the Ceann Comhairle for allowing me to raise this matter on the Adjournment this evening. It is of critical importance to Limerick and in particular to the regeneration areas of Limerick, namely, Moyross, Southill, St. Mary's Park and Ballinacurra Weston, and to the people who reside therein. The original plan for Limerick's regeneration was drawn up by John Fitzgerald three years ago in April 2007. Since then, from a physical perspective, nothing has been built. All that has happened is that more than 400 houses have been demolished in the regeneration areas. To date, people have lost faith in the process and it is critical for faith to be restored to bring back credibility.

A revised first phase implementation submission has been made to the Government in the past two weeks. The Minister of State should indicate whether it has been presented to the Cabinet and when it will be approved. It envisages a revised Government input of €924 million, rather than €1.6 billion, due to savings over a 15-year period, which equates to €60 million per year. The Government contributed €25 million towards annual running costs last year and is committed to so doing again this year. However, additional funding is needed to ensure the capital projects can get under way in the four regeneration areas.

Furthermore, this has enormous employment creation potential. The first phase implementation plan that has been submitted to the Cabinet demonstrates that 4,500 jobs can be created out of the regeneration process. In other words, more than 2,800 jobs can be created directly and 1,680 jobs indirectly. Such job creation is needed as a matter of urgency in Limerick, where nearly 22,000 people are on the live register and which has an unemployment rate of 14.2%, which is well above the national average. Moreover, the regeneration areas have an unemployment rate that is five times the national average. People are entitled to have the Government honour its commitment to the regeneration project.

In addition to funding the first phase, which comes to €337 million, the Government's approval of the overall master plan that was submitted to the Cabinet 18 months ago in October 2008 is critical. People in the regeneration areas are entitled to more and a point has been reached whereby the Government must, in the words of the new Financial Regulator, Mr. Matthew Elderfield, show us the money for regeneration. Furthermore, I tabled an amendment to the most recent Finance Bill to the effect that tax designation incentives specific to the Limerick regeneration project would be considered. I understand this is being considered by the Department of Finance and I urge that it be allowed to proceed because Limerick requires the physical side of the regeneration projects to get under way in the four regeneration areas. Many elderly people live in these areas and I note that three pillars underscore regeneration. The physical pillar, which I have dealt with, pertains to houses and infrastructure being built, for which we need funding urgently. The economic pillar obviously would be the spin-off in terms of employment as it would provide a job stimulus to Limerick. Many people work in the construction sector. Ironically, the Limerick regeneration project will see houses being built that need to be built as distinct from houses built during the latter days of the Celtic tiger which were surplus to requirements and are ending up in NAMA at a cost to the taxpayer that will be a burden for generations to come.

Furthermore, there is the social aspect. Will the Minister of State consider a multi-agency approach to regeneration areas whereby the regeneration agencies, local authorities, Garda Síochána, HSE and the Departments of Education and Science and Social and Family Affairs work on an integrated approach to all of the issues that present?

I am looking for good news from the Minister of State. We need money as a matter of urgency. The first phase needs to be approved and the money extended. The overall Limerick regeneration master plan, which has been sitting on the Cabinet's table for more than 18 months, must be approved if certainty is to be given to those living in the regeneration areas to the effect that the project will go ahead in its entirety and the Government will honour its promise.

Deputy Ciarán Cuffe

I thank the Deputy for once again bringing the matter of the regeneration of Limerick city to the attention of the House. It continues to be an issue that the Government and, in particular, my ministerial colleagues at the Department of the Environment, Heritage and Local Government have been driving forward across all relevant Departments, State agencies and local authorities.

The Government endorsed the vision for the overall programme prepared by the regeneration agencies and requested that they prepare a detailed, fully costed plan for the first phase by the end of the first quarter of this year. The process was led by the agencies board and its staff, which engaged the professional services of the National Building Agency's specialist regeneration team. A number of steering groups were established, with expert input from managers, planners, architects and engineers from across the local authorities and the relevant Departments, to develop the phase 1 plan. Last February, to ensure that the momentum for completion of the plans was maintained, the Minister of State, Deputy Michael Finneran, made a further trip to Limerick to visit the regeneration areas of Moyross, Southill, Ballinacurra Weston and St. Mary's Park and to support the co-operative efforts of all involved in developing the phase 1 plan.

I am pleased to say that the Limerick Regeneration Agencies board adopted a proposed phase 1 implementation plan on 7 April and, last week, the agencies formally presented their submission to the Department of the Environment, Heritage and Local Government. A memorandum for Government is being prepared with the intention that this plan will be presented for Government consideration in the coming weeks.

The phase 1 plan presents us with a useful roadmap for, in particular, the physical as well as the social and economic regeneration of these communities for the period to December 2014, with a total estimated cost of projects amounting to some €337 million. It proposes strategic infrastructure projects of benefit to the wider Limerick region, including a number of new roads, sporting and recreational facilities and a major civic hub centred in Moyross. The plan identifies a range of new housing projects for each of the four areas as well as refurbishment and infill projects to retain certain areas of existing good quality housing. The plan also notes the importance of delivering mixed tenure housing as well as the clustering of projects in the various phases to deliver new communities within the wider strategic planning context. Key community facilities, including a south side integrated youth centre, an education campus at Southill and a community crèche at St. Mary's Park among others, are also identified. The long-term plan also takes account of the new value in the construction market and revises down the total public sector investment envisaged in the original master plans from €1.7 billion to €924 million.

School Placement.

Deputy David Stanton

May I share one minute with Deputy Michael Ahern?

Acting Chairman (Deputy Jack Wall)

Is that agreed? Agreed.

Deputy David Stanton

The Acting Chairman might stop me when I am close to the time.

Last year, a number of parents approached me and told me that their children were on waiting lists for second level schools. When I inquired, I found that virtually every second level school in our area was full. According to my projection of the future, I discovered that there will be 1,480 extra secondary students looking for school places in six years' time. Where are those children to go? I am aware of no plans to build new schools or to extend existing schools. As the Minister of State knows, getting a school up and running takes time. Further figures contained in projections made by the Department of Education and Science and the local authority are even more frightening.

Due to the rail link in Midleton, the way in which the county development plan was put together and so forth, there has been an explosion of housing, but there has been no provision for secondary schools. Primary schools are also under ferocious pressure, but it is just not good enough to add extra classrooms to secondary schools. Specialist rooms like woodwork rooms, science labs and so forth are required and must be properly planned and co-ordinated.

I contend that the Department must extend CBS Midleton this summer. It should also start planning immediately to build a new second level school in Midleton and another in Carrigtwohill. The local authority has done its bit by zoning the land, but the Department has not. We have been trying to get information and I have raised this issue in the House time out of number. My colleagues have also raised it in their own ways. However, nothing is happening. What are Deputy Michael Ahern and I to say to parents who, in two years' time, approach us about there being no second level places for 20, 40 or 50 children? The situation will get much worse. If my figures are right, the relevant number will be almost 1,500 children in six years' time. I have visited the schools and got numbers from all of them bar one. These numbers are frightening.

Glanmire, which is on the edge of the area, is also full and Cobh is under pressure. The Department has produced maps using the latest technology. East County Cork is one of the few areas in the country that are marked in bright red, which shows that the situation is serious. It is an emergency. The Department's maps indicate there will be a requirement for up to 64 classrooms in the east County Cork area, including Midleton, Carrigtwohill and Cobh.

I hope that the Minister of State will come up with something and tell us that someone is at least examining this matter and that there are some plans. As an experienced planner, he knows that drawing up plans, getting planning permission, the tendering process and then getting the building up and running take a number of years, but the situation cannot wait any longer. My colleague across the floor wants to speak, so I will allow him in.

Deputy Michael Ahern

I thank my colleague, Deputy Stanton, for giving me a minute to support him in his plea for immediate and urgent works with regard to schools in the east County Cork area of Midleton, Carrigtwohill and Castlemartyr. The population in our area has doubled in recent years. Come next September, there will be a shortage of places, particularly for boys, in Midleton's secondary schools, which take in Carrigtwohill. In fact, 48 students will come from Carrigtwohill national school, almost double the figure of recent years. The situation is urgent.

The Minister, Deputy Batt O'Keeffe, as the then Minister for Education and Science, produced a list in which our area was a priority, as verified tonight by Deputy Stanton. I hope that the Minister of State has received some information that will recognise the urgency of carrying out secondary schools works in our area.

Deputy Ciarán Cuffe

I am taking this matter on behalf of my colleague, the Tánaiste and Minister for Education and Science, Deputy Coughlan. I thank Deputy Stanton for raising the matter as it affords me the opportunity to outline the process being utilised to ensure that there will be adequate accommodation in schools at primary and post-primary level in all parts of the country.

The forward planning section of the Department utilises the latest in geographical information system, GIS, technology to assist in planning school requirements into the future. The GIS contains information on all schools — both primary and post-primary — which is geocoded to their locations. This information is then linked to the relevant demographic information relating to those locations. Typically, such demographic information will be obtained from the Central Statistics Office's census data, the General Registrar of Births, the Department of Social and Family Affairs, An Post's geodirectory and information supplied by local authorities through development plans.

Growth projection figures are applied to existing population statistics with a view to assessing future requirements and identifying the areas experiencing highest growth at primary and post-primary level. In addition, and as a matter of course, there is ongoing liaison between the Department and local authorities to establish the location, scale and pace of any major developments and their possible implications for school provision.

The forward planning section is in the process of carrying out detailed analysis of over 40 identified locations of highest population growth in order to identify the school accommodation requirements up to and including the 2014-2015 school year. In light of the increase in the birth rate in recent years, the initial focus of this analysis is on primary school accommodation requirements. A more detailed analysis of post-primary accommodation requirements will follow.

Deputy David Stanton

Dear God, this is terrible stuff.

Deputy Ciarán Cuffe

When the required reports have been completed for these initial identified areas, the forward planning section will continue to work on preparing reports on a priority basis for the remainder of the country.

Deputy David Stanton

How can the Minister of State read that script into the record?

Deputy Ciarán Cuffe

Overall school accommodation requirements in Midleton, including any requirement for additional post-primary accommodation, will be considered in this regard.

Deputy David Stanton

This is unbelievable.

Acting Chairman (Deputy Jack Wall)

Deputy Stanton should allow the Minister of State to conclude.

Deputy Ciarán Cuffe

In addition to the detailed analysis of accommodation needs currently being carried out by forward planning section, the Department is also examining a number of broad policy issues regarding the establishment of new post-primary schools. As part of this, consideration is being given to the setting up of a new framework in respect of the establishment of new second level schools and their patronage.

Any proposed building projects required arising from the forward planning section's analysis will be considered in the context of the Department's multi-annual school building and modernisation programme for 2010 and subsequent years. However, in light of current competing demands on the capital budget of the Department, it is not possible to give a more indicative timeframe for the delivery of projects at this time. I again thank Deputy Stanton for raising this issue.

The Dáil adjourned at 9.25 p.m. until 10.30 a.m. on Thursday, 22 April 2010.