Dáil Éireann debate -
Thursday, 6 Oct 2011

Vol. 742 No. 4

Topical Issue Debate

Vocational Education Committees

Deputy Pat Breen

This is the first time I have availed of the new topical issue system. It is good that it allows for an exchange of views. I am raising the matter of the designation of headquarter locations in the new vocational education committee structure. I am anxious that the Minister for Education and Skills approve the location of a VEC sub-office in Ennis, County Clare. I thank the Ceann Comhairle for facilitating my request to raise this issue in the presence of the Minister of State, Deputy Cannon, who is here instead of the Minister, Deputy Quinn.

The rationalisation or amalgamation of any department is never easy, but the current tough economic circumstances obviously make it particularly difficult. When there is restructuring on a regional basis, it can involve the transfer of services from one county to another. I would have thought there was a compelling case for County Clare VEC to remain independent, in the light of its budget, enrolment size and geographical location. However, it has been decided to merge it with the two Limerick VECs. The Minister announced on Tuesday that the headquarters of the new merged VEC would be in Limerick. I am disappointed that the decision does not provide for a sub-office of the VEC to be located in Ennis. Once again, County Clare is losing out on an essential service.

The staff of the extremely busy County Clare VEC office in Ennis do an excellent job. A great deal of vocational education services are provided from the Ennis office. Deputies will be aware that at this time of the year the VECs deal with a huge volume of applications as they administer the third level maintenance grants scheme. I know this because my office interacts with County Clare VEC on a daily basis. While applicants can use the online application service, the reality is that each application can generate a number of inquiries which need to be dealt with on a one-to-one basis. I know of a young man from Kilrush who had to drop into the VEC office in Ennis on four occasions to follow up on his application.

County Clare VEC provides a range of other services. It processes school transport applications for the 18 post-primary schools in the county. It is involved in adult and further education. It administers the Burren Outdoor Education Centre in Bell Harbour which provides a quality outdoor education experience for people of all ages. It also runs St. Joseph's Education and Training Centre which mainly caters for Travellers.

I ask the Minister to have regard to the geography of County Clare when he reconsiders his decision not to locate a sub-office of the new amalgamated VEC in Ennis. The closure of the existing office in Ennis would cause significant inconvenience for many people. A person from Kilrush who has a query with the VEC would have to travel to Limerick, a round trip of 160 km.

We have already experienced closures in Ennis. When the Department of Agriculture, Fisheries and Food closed its office there last year, it had an impact on farmers. We all recognise that the need to drive efficiencies is extremely important, but it cannot always be done at the expense of people. I suggest the retention of a sub-office in Ennis would be cost-neutral because the Department owns the building in Ennis. It would make economic sense to continue the use of the facility.

County Clare always seems to be the poor relation when decisions on regional services are being made. We have already lost our accident and emergency service and our Department of Agriculture, Fisheries and Food office to Limerick and now we are about to lose our VEC office. I ask the Minister to reconsider his decision and learn from the mistakes of the past. The location of a VEC sub-office in Ennis to maintain some level of service in County Clare would make economic sense, notwithstanding the problems being faced by the VECs and the Department of Education and Skills.

Minister of State at the Department of Education and Skills (Deputy Ciarán Cannon)

I welcome the opportunity to outline this week's decision by the Minister for Education and Skills on the location of the headquarters of the new education and training boards following the Government decision to revise the configuration of VECs. As Donegal, Kerry and Dublin city VECs are not being merged, there will be no change to the location of their headquarters at Letterkenny, Tralee and Ballsbridge. Six of the new entities will have sub-offices for the foreseeable future. The Minister has decided the amalgamated north and south Tipperary board will have its headquarters in Nenagh and a sub-office in Clonmel; the Cavan and Monaghan board will have its headquarters in Monaghan and a sub-office in Cavan; the Kildare and Wicklow board will have its headquarters in Naas and a sub-office in Wicklow; the Mayo, Sligo and Leitrim board will have its headquarters in Castlebar and sub-offices in Sligo and Carrick-on-Shannon; the Galway city and county and Roscommon board will have its headquarters in Athenry and a sub-office in Roscommon; and the Waterford city and county and Wexford board will have its headquarters in Wexford and sub-offices in Waterford and Dungarvan.

A single headquarters location has been designated for each of the remaining seven new entities. While staff will be expected to move to the new location as soon as is feasible, sub-offices will be maintained in the immediate short term to facilitate the mergers. The amalgamated Cork city and county board will have its head office within the greater city area of Cork; the Meath and Louth board will have its headquarters in Drogheda; the Dublin and Dún Laoghaire board will have its headquarters in Tallaght; the Laois and Offaly board will have its headquarters in Portlaoise; the Carlow and Kilkenny board will have its headquarters in Carlow; and the Longford and Westmeath board will have its headquarters in Mullingar. The newly merged Limerick city and county and Clare board which has been referred to by the Deputy will have its headquarters within the greater city area of Limerick. In arriving at these decisions the Minister considered a range of factors, including the need to ensure VEC headquarters would be in locations that, to the greatest extent possible, facilitated staff redeployment under a redeployment scheme within the context of the Croke Park agreement and the need to operate at lowest cost having regard to the accommodation available in existing locations.

It is important to note that the offices of the three specific VECs mentioned by the Deputy are within a 45 km radius of one another. Consequently, there is no barrier to redeploying staff under the Croke Park agreement and no requirement for sub-offices in these cases. I am sure the Deputy will appreciate that the main purpose of the VEC rationalisation is to bring about greater efficiencies. This goal can be realised, in part, by reducing the number of offices used by VECs. In the circumstances, the Minister is satisfied that the optimum headquarters location for the newly merged VEC is within the greater city area of Limerick. I expect staff in Ennis will move to the designated headquarters location as soon as is feasible. A sub-office in Ennis will be maintained in the short term to facilitate an orderly merger.

Deputy Pat Breen

I do not want to compare County Clare with other counties that have sub-offices. That is not what I want to do. However, I am astonished to learn that many other counties will have sub-offices. When one considers the geographical size of County Clare, one realises that Loop Head, for example, is 80 or 90 miles from Limerick. That long distance can be compared to the distances involved in some of the places where sub-offices have been established. I will not name any of them. While I am glad that the Ennis office will be maintained in the short term, I hope we can make a case for maintaining it in the long term. County Clare VEC owns its state-of-the-art two-storey office building which was refurbished a few years ago. The office is ideally located and has car parking facilities. As I said, the VEC provides a number of other services also. Perhaps more optimal use could be made of the building to provide more educational services. Given that the Ennis office will be retained on a short-term basis, perhaps the Department of Education and Skills might consider retaining it as a sub-office on a long-term basis. I am delighted the Minister of State, Deputy Kelly, is here. He is lucky enough because there will be a sub-office in Nenagh.

Deputy Alan Kelly

It is a full one.

Deputy Pat Breen

The amalgamated VEC which will be based there will cover a single county. Perhaps some influence was brought to bear along the line in that case. I hope I can use my influence to convince the Minister of State, Deputy Cannon, of the need for an office in Ennis to deal with the provision of education services in County Clare which have been eroded for far too long.

This can be done in a cost-efficient way. We own the building and now is not the time to sell it. County Clare VEC has a strong and good reputation in dealing with education and this service is badly needed in the area. All I want is a sub-office to deal with some of the day-to-day queries while the main office in Limerick deals with other issues. I appeal to the Minister to take a fresh look at the matter, in particular in regard to the economic aspect, to ensure we can keep a sub-office in County Clare.

Deputy Ciarán Cannon

I thank the Deputy once again for outlining the case for the sub-office. I point out again that Clare and Limerick are not unique in having an arrangement in place where there is one headquarters and no sub-office as there are six other entities across the VEC structure in a similar situation. The decision not to have a sub-office in each of these seven locations was driven by the fact of the redeployment distance of 45 km. I note the three existing VEC headquarters in the Clare-Limerick region were all within 45 km of one another, so staff redeployment was not going to be an issue. This was the main driving force behind the decision not to retain a sub-office in Ennis.

Deputy Breen is correct to point out that the staff in Ennis and in every other VEC headquarters across the country are doing excellent work in serving the needs of the people they encounter on a daily basis. I have every confidence this work will be able to continue throughout the new locations. From the initial two meetings of the SOLAS implementation group, which is overseeing the merging of further education and training and we hope, will turn a significant new chapter in Irish education towards the end of next year when SOLAS finally becomes live, I am sure the significant information and communications technologies that will be made available across the structure of SOLAS will allow this excellent work to continue and the service that is already provided to be continued.

On a day-to-day basis, I foresee the main interaction between the general public and the VEC structure happening through the locations of the VECs themselves — through their schools and further education and community training centres — as well as through NEES, the national employment and entitlements service, which will be the first port of call for people wanting to avail of further education and training. I do not believe the lack of a sub-office in Ennis will detract from the service that will be available to people in County Clare. I have every confidence in the current staff at Ennis and their soon to be merged colleagues in the area of Limerick, who will continue to provide an excellent service for the people they serve.

Motor Tax Collection

Deputy Eamonn Maloney

I ask the Minister to undertake a review of the current system for the collection of motor tax, which I argue is an antiquated one. Given the current financial environment, every Department, as well as every legislator, is conscious of the need to become more financially efficient. I would argue that the collection of motor tax by the State in its present form is the most inefficient and expensive way of doing this that could be, which is why I ask the Minister to review it.

When one considers the methodology of motor tax collection, people drive to their local office to pay their tax, which is anti-environmental in the sense that people should not make unnecessary journeys. Every recent Government has tried to promote the idea of drivers not using their vehicles unnecessarily, be it in regard to schools or otherwise, and the same should apply in this situation. When one goes to a local tax office, cars are double and treble parked outside it, which is very negative for the environment.

The policing of motor tax is a crazy system. Members can think of many positive things gardaí could do other than running around trying to police the payment or non-payment of motor tax. That is not the way it should be done. Moreover, if one carries on into the realm of those who do not pay their tax or display their tax discs, many of them end up in court, as can be seen from the national and provincial press. This also involves police and court time, is very expensive and is the wrong way of dealing with this issue. In addition, anyone working in a local tax office will know that in the present environment, where many are unemployed, the level of motor tax evasion goes through the roof. People hold back on payment and a small number do not pay at all. If one takes the point about policing to its conclusion, some who do not pay end up in court and, in some cases, to add to the whole nonsense of the present system, people end up in jail, which adds to the expense for the State. All of these reasons add up to a compelling case to review the current system.

While I accept there is an argument against this, in other jurisdictions motorists pay tax on their fuel, be it petrol or diesel. The fairness in this system is that those who use their vehicles the most, pay the most. It is added on to the driver's fuel cost, so if I am a very regular driver, it will cost me more, whereas if I am a modest driver and use my vehicle only when needed, I will pay less. What could be fairer than that?

Minister of State at the Department of the Environment, Community and Local Government (Deputy Willie Penrose)

I thank Deputy Maloney for raising this issue, which I know is important to him. As he is aware, the general scheme of a motor tax Bill is currently being prepared in the Department, but this does not include plans to abolish the current system of motor tax in favour of one that places additional taxation on motor fuel. The change in policy suggested would have significant implications across a number of headings, and would require major consideration. I can deal with only a few of these headings in the time available.

First, the maintenance of the tax base would require a substantial increase in excise rates of at least 20 cent per litre. The impacts on inflation would be significant at a time when Government needs to drive down prices across the economy to maintain competitiveness. The impacts on different categories of drivers — urban, rural, commercial, business, private and so on — would need to be understood. Goods vehicles make up 13% of the national fleet, and these, together with public service vehicles and buses, are high usage and high mileage vehicles, which would have higher costs under a pay-as-you-drive system. The potential impacts on business competitiveness are clear.

The proceeds from motor tax are the main element of the local government fund. This fund is used predominantly to meet general purpose requirements of local authorities and to support the maintenance and development of non-national roads. Motor tax receipts in 2010 were some €1 billion and abandonment of motor tax would require a new source of income for local authorities of this order.

A significant increase in fuel duty would lead to an increase in cross-Border fuel purchasing, further depressing the tax base and requiring compensatory adjustments elsewhere to make up the shortfall. The potential for an increase in fuel laundering is also clear.

We must maintain a robust and accurate national vehicle and driver file to ensure compliance with roadworthiness testing, insurance certification and other traffic controls such as penalty points and fixed charge offences. In the absence of drivers paying motor tax, alternative ways to maintain the national vehicle and driver file would have to be found and costed. I do not believe an alternative system could be as effective as the current system.

All in all, the potential benefits which Deputy Maloney has identified would have to be weighed against these issues, and many others, before any change of the kind proposed by him could be contemplated.

Deputy Eamonn Maloney

I acknowledge and to some extent anticipated the arguments that would be presented against my argument.

However, my argument, based on other jurisdictions, is that when one considers the value for money for the State, meaning the taxpayer, and when one adds in all the examples I have illustrated such as policing, police time in court and so on, it is more beneficial. I forgot to include the most important factor, that is, the avoidance of motor tax. I do not wish to use figures from the United Kingdom as comparisons are difficult but I am aware of them and this factor gives rise to a substantial loss to the Exchequer. My point is that were one to accumulate what is lost by the State in respect of motor tax avoidance and what it loses in policing time, court time and so on, the gain for the State and for the taxpayer becomes evident. I do not suggest this proposed system is perfect but in terms of cost efficiency, the Department of the Environment, Community and Local Government should consider the position in other jurisdictions and then raise the argument as to how it continues with that system. I argue that we lose more money for the State by continuing with the present archaic system.

Deputy Willie Penrose

I thank Deputy Maloney, who certainly holds these views strongly. As the Deputy has outlined, a pay-as-you-go system would have some potential benefits. However, the Deputy also will recognise there are many actual and potential down sides. There is a danger of significant economic dislocation and loss of competitiveness and there also would be a clear winners and losers on foot of the switch proposed by the Deputy. As a further example to those which were listed in my initial reply, many rural commuters must travel long distances to work and they would be likely losers compared with urban dwellers with shorter commutes. If the switch was to be made on a revenue-neutral basis, it is far from clear where any financial assistance to compensate those people for their losses could come from in the current budgetary circumstances. Everything must be weighed in the balance.

I note the proposed motor tax Bill will consolidate and modernise motor tax law in general and will reform the administration of the motor tax system to ensure consistency, resource efficiency and best customer practice in service delivery and all Members wish to subscribe to that. For example, it will address the abuse of high levels of off-the-road declarations being made, which results in substantial ongoing losses of revenue. Moreover, significant and necessary improvements to the motor taxation system and its administration are contemplated. However, at this point, for the reasons outlined earlier and notwithstanding the taking into account of the Deputy's submissions, I do not envisage its replacement in the manner suggested by Deputy Maloney.

Air Accident Investigations

Deputy Willie O’Dea

I am grateful for the opportunity to raise this important matter in the Chamber today. Next Wednesday will mark the second anniversary of a dark day in the lives of two decent families, because 12 October 2009 was the day on which an Air Corps aircraft on a training flight crashed at Cornamona, west County Galway, resulting in the deaths of two of the Air Corps' best and brightest, namely, instructor Captain Derek Furniss and Cadet David Jevens. I was Minister for Defence at the time and recall well the scene at Baldonnel aerodrome as the coffins were brought in late at night, as well as the sense of shock, anguish and helplessness that permeated the entire defence community and people further afield. These scenes were repeated in no small measure at the funerals over the next couple of days, both of which I attended.

Obviously neither I, as Minister for Defence, nor the defence community nor anyone else was in a position to bring the two young men back. At the time, however, we promised their families that we would set up immediately an investigation by the air accident investigation unit, which would investigate the causes and the reason this happened and would explain this fully to the families by way of publishing a report at the earliest possible opportunity. The intention was to enable a measure of closure to be brought to the families, which have suffered greatly as a result of this unfortunate incident.

Records will show that when an investigation of this type is established, it usually takes a year to investigate the matter and come to the final report, which then is published. In this case, two years will have elapsed next Wednesday and yet the final report has not been published. Moreover, I am sorry to state the lines of communication between the Air Corps and the Department of Defence and the families of the two — or certainly the family of Cadet Jevens — are minimal to say the least, which greatly disappoints me. The usual procedure is that a draft report is prepared and given to all the interested parties to read. Thereafter, any interested party within this country has 30 days in which to make an observation on the matter, while parties outside the country, usually the manufacturer of the aeroplane, have 60 days in which to communicate.

The draft report was not given to the families until 14 July last, which was 21 months after the accident. Observations were made and the matter literally has been in limbo since. The Jevens family, which has spoken to me about this matter, is suffering the greatest anguish. It is unimaginable and no words of mine could adequately do justice to the anguish and trauma that family has suffered as a result of this incident. Moreover, this has been exacerbated out of all proportion by the delay in publishing the report. Consequently, I ask the Government to publish this report. While the Jevens family will never get over the loss of young David — his younger brother's main ambition in life now is to join the Air Corps — they need some closure and this is the only closure the State can offer to them. As more than double the usual length of time has elapsed and the second anniversary of the accidents falls next Wednesday, I ask the Government to undertake to either publish the report immediately or to give me a good reason it cannot be published.

Minister of State at the Department of Transport, Tourism and Sport (Deputy Alan Kelly)

I am pleased to take this opportunity to speak on behalf of the Minister for Transport, Tourism and Sport, who is attending a European Union Transport Council meeting today, on the subject of the final report regarding the accident to the Air Corps PC-9(M) training aircraft at Cornamona, County Galway, on 12 October 2009. On behalf of the Minister, the Department and myself, I express my deepest sympathy to the families, friends and colleagues of Captain Derek Furniss and Cadet David Jevens, who lost their lives in this tragic accident.

At the time of this accident, the Deputy was Minster for Defence and with the then Minister for Transport, he agreed the investigation of the accident would be conducted by the air accident investigation unit of my Department in accordance with Regulation No. 27(1) of SI 205 of 1997, Air Navigation (Notification and Investigation of Accidents and Incidents) Regulations 1997. Three senior officers of the Air Corps were assigned to the air accident investigation team. A preliminary report on this accident was issued and published by the air accident investigation unit on 17 November 2009.

Following a complex and detailed investigation and in accordance with Regulation No. 18 of SI 205, a notice of findings that included a draft report on the accident was issued on 14 July 2011 to all interested parties associated with the accident. These interested parties included the families of both deceased pilots, the Department of Defence, the Air Corps, the state of the manufacturer of the aircraft, that is, Switzerland and the manufacturer of the aircraft, namely, Pilatus. All parties made formal comments, one of which was a substantial legal submission. These submissions required detailed consideration and a response from the air accident investigation unit in accordance with the requirements of notice of findings, Regulation No. 18(1)(c) of SI 205.

An additional factor that has contributed to the delay in finalising the report is the provision of the significant resources required to deal with the international commitments associated with the fatal accident involving a public transport aircraft at Cork Airport on 10 February in which six people lost their lives and six others suffered injuries. However, I am pleased to be able to inform the Deputy that the Air Accident Investigation Unit has advised me that its response to the submissions received is nearing completion and that the release of the final report is imminent.

Deputy Willie O’Dea

I thank the Minister of State for his positive response. He will appreciate, however, that the delay cannot be justified. It took 21 months to get the draft report and now, two years on, the final report has not yet appeared. In the meantime the family is suffering tremendous anguish, pain, sorrow and a sense of loss. I have done my best to communicate to the Government the urgency attached to bringing closure to the matter. I am delighted that the Minister of State has told me that publication of the final report is imminent. While we will not hold him to it, perhaps he might like to venture an approximate timescale within which the family can expect to receive the report.

Deputy Alan Kelly

I agree with the Deputy. The Government wants to bring closure — whatever closure might mean, as it is a word that is often used — for the families in their loss. I accept that they have endured considerable suffering. As I said, a substantial legal submission needed due consideration for a number of reasons which I will not detail. However, I assure the Deputy release of the report is imminent; it will be published in a very short period of time.

Social and Affordable Housing

Deputy Brian Stanley

I am grateful to the Ceann Comhairle for giving me the opportunity to raise the matter of home loans acquired through local authorities to buy a house under the shared ownership scheme, the annuity scheme and the affordable housing scheme. Typically, these were, to use the awful term from America, sub-prime borrowers. They were people who could not get loans from building societies, banks or other lending institutions and they needed to be refused by two of them before a local authority would grant a loan. They applied in good faith for these loans to buy either an affordable house or a house under the shared ownership scheme or for the full annuity loan to buy 100% of the house. Many people who wanted to acquire their own home were standing on their own two feet at the time and earning reasonably good wages. There were perhaps two wages in the household. They now find themselves with no wages coming into the house and they are also caught in a negative equity trap.

The problem is escalating. Arrears are accumulating on households at a major rate. In County Laois, of 514 loans, 136 are in distress. In other words, they are three or more months in arrears. In the shared ownership section, 33% of loans are in distress, which indicates the seriousness of the problem. Families are under great pressure, which is affecting relationships. It has reached the stage where it is affecting people's mental and physical health. It is also affecting local authority staff and public representatives who are dealing with the matter. It is putting everyone under pressure and nothing short of a crisis.

Houses throughout the country are being repossessed, with the tenants being evicted and the houses often being boarded up. They are then vandalised, following which they will be sold at half or one third of the value of the original loan. If the original loan was for €280,000, a house might be sold for €80,000 or €90,000. This is leaving the local authorities and the individuals involved with a major loan hangover from the negative equity. A family then typically needs rent allowance and is put on the local authority housing waiting list which, in turn, puts pressure on the system and the family.

We are often asked for solutions. I wish to propose some solutions from this side of the House. Just as with private institutions, we need to put measures in place to deal with loans through local authorities. Burden sharing is an option, as is shared equity. A local authority could take over ownership of a house in cases where the occupier is clearly not in a position and will not be in the short or medium term to pay off the loan and rent the house to the occupier. There could be interest-only repayments. Payments could be deferred for a period or the period of the loan could be extended.

Relief could be brought immediately in the case of shared ownership scheme loans by reducing the rent on the fraction of the house being rented — typically 40% to 50%. Rents are increasing by 4% per year, which is causing major problems. Instead of reducing them or keeping them unchanged, they are increasing by 4%. This matter is under the direct control of the Minister of State.

From talking to officials, I am aware that a review group is in place and I would welcome any steps to address the problem which has been ongoing for some time. However, nothing is happening. There is no outcome or solution. What are the Minister of State and his officials doing about the issue? It is a crisis and we must address it. It is piling up on top of the local authorities and the unfortunate people living in the houses in question. The priority must be to keep them in them. Repossessions — some of which have taken place in my immediate neighbourhood — do not serve anybody. It also causes problems for the people living beside repossessed houses which are often boarded up for months on end and vandalised and consequently worth less. The unfortunate people from whom a house has been repossessed have moved to private rented accommodation and the Government which should be trying to save money is paying rent allowance for them, which is ludicrous.

Colleagues have told me about similar problems in other parts of the State; the problem it is not confined to the midlands. We need to get on top of it, as it has escalated in the past three to four years and local authority officials are at a loss to know what to do. Obviously, my first concern is for the constituents on whom this pressure has built up. However, it is also causing problems for local authorities in their balance sheets. When they go to prepare their budgets, this matter will have a major negative effect because they need to find the money to return to the Housing Finance Agency. As it stands, nobody is winning. The householder, the local authority and the taxpayer are all losing.

Minister of State at the Department of the Environment, Community and Local Government (Deputy Willie Penrose)

I thank the Deputy for raising this important matter. The Government is acutely conscious of the difficulties many households are facing in terms of mortgage arrears. Against this background, its Economic Management Council, prior to the summer recess, requested an interdepartmental group to consider further necessary actions to alleviate the increasing problem of mortgage over-indebtedness and report to it by the end of September. The outcome of the work done by the group which was chaired by the Department of Finance and comprised representatives from other relevant Departments, the Central Bank and expertise from the banking sector, has been presented to the Economic Management Council. The Minister for Finance will bring the report to the Cabinet very shortly, after which it will be published.

To date, there is no evidence to suggest wider economic circumstances are creating problems specifically for local authority borrowers in meeting mortgage repayments. The most recent published data available to me are the service indicators 2009, published in February 2011. These show the local authority mortgage arrears level running at 15.08%, a marginal increase on the level in 2008 — 11.6%. I know the Deputy has outlined his experience. A total of 16.17% of mortgage accounts in the private sector are now either in arrears for 90 days or more, or have had their mortgage restructured. This shows that despite local authorities' role as lenders of last resort, generally providing loan finance to the lowest income home buyers, the level of mortgage distress is no worse than for other higher income categories of borrower. Similarly, despite worsening economic conditions generally, repossession remains extremely rare for local authority borrowers, with only 128 repossessions across all local authority areas carried out between 2005 and 2010. Clearly, where repossession does occur it is only as a last resort, and my Department is aware that it generally involves those households in arrears who refuse to engage with the local authority lender.

Local authority borrowers have received considerable protection from the worst effects of the downturn in terms of their borrowing costs. The effective rate for borrowers has come down by 2% since the end of November 2008 and now stands at just 3.25%. These rates represent exceptional value when compared with rates charged by commercial lenders. As of now, the local authority rate is more than 1% lower than the average market variable rate.

Provisions regarding lending by local authorities for the purposes of house purchase are set out in section 11 of the Housing (Miscellaneous Provisions) Act 1992. Where a loan stands in default, section 11(10) of that Act and, more recently, section 34 of the Housing (Miscellaneous Provisions) Act 2009, provide that a local authority may make such monetary arrangements with a borrower as the authority considers equitable to take account of the particular circumstances of the borrower.

I hope that every effort is made to contact the local authority to see what compromise can be made on monetary arrangements with the borrower. I have no doubt that people like Deputy Stanley, who are in constant contact with the housing section of local authorities, would ensure this is done. Local authorities have the power to take the situation into account and to come to an agreement that is considered equitable, taking into account the particular circumstances of the borrower. I trust that most people are availing of the opportunity for discussions with the lender.

Deputy Brian Stanley

I thank the Minister of State for his reply. There is a problem with contacting the finance section of the local authorities. We can talk to them until the cows come home, but if someone should be paying €150 per week in mortgage repayments yet is only earning €230 per week, then that person can only pay €40 or €50. That differential of €100 is mounting up in the local authority balance sheet and on the account of the person who has taken out the loan. The room for manoeuvre for local authorities is very limited. Local authority officials in different counties tell us they have very little room to manoeuvre because it is showing up on their balance sheet. They do not have a pot that they can dig into, but a revenue account which is becoming tighter and tighter. The Minister of State knows that from dealing with other local authorities. We have to give some relief to take the pressure off both the home owner and the local authority.

I mentioned the case of local authority mortgage arrears levels in Laois and compared the three different kinds of loans, namely, the shared ownership loan, the annuity loans and the affordable housing loans. The figure is 21% in Laois, but the Minister of State's general figure is 15.08%, which means that the levels are lower in other counties across the State. I am not disputing the Minister of State's figures, which mean that one in seven local authority mortgages is in arrears, while one shared ownership loan in three is in difficulty in my county. We have to do something about this problem.

The Minister of State said that the review group reported back at the end of September. What is the outcome of that review? When can we see it in this Chamber? What kind of measures are being considered? Do the Minister of State and his officials understand that a sense of urgency is needed for this? We do not solve problems by putting them off. This has been put back for the past three or four years, and I thought the Minister of State would take it up when he got this job. I hope he will do so and I am taking him at his word that he will do something about it.

Surely the most important thing is to keep people in the family home. This suits no one. There are four sets of losers when people are put out of the family home: the family, their neighbours, the local authority and the Government. Does the Minister of State agree?

Deputy Willie Penrose

I certainly agree with that last point. There is only a circle of losers when that happens. I am not disputing what the Deputy has said, as he has the experience locally. The review group will be reporting in the next couple of weeks. It will be brought to Cabinet fairly soon, and will be published, so I am hopeful that will take place in the next couple of weeks.

I note the Deputy's comments on the shared ownership loans. It is going up in the rental situation, so the gap is widening. The most important piece of advice for any borrower facing difficulties and meeting repayments is to engage early and proactively with the lender to seek to achieve an agreed solution. I think Deputy Stanley might agree with me that local authorities have long led the way in dealing proactively and sympathetically with mortgages. I know that sympathy does not fill the jar, but the level of repossessions by local authorities is at the bottom of the list, although they have risen recently. They can and do exercise the powers available to them and endeavour in all arrears cases to engage proactively and constructively with a distressed borrower, with the aim of enabling a household to remain in their own home. That is the best solution if it can be achieved. If people are forced to leave their home owing to default issues, then the problem is only being transferred from one aspect of Government expenditure to another one. There is no real gain involved.

The available data suggest that repossession, where it does occur, is always a last resort. My Department issued guidelines last year based on the regulator's code of conduct on mortgage arrears to reflect the Central Bank's revised code of conduct, which replaced the previous code on 1 January 2011, and which was informed by the deliberation of the expert group on mortgage arrears and personal debt. My Department is updating guidelines to local authorities, in consultation with the city and county managers. I am hopeful these will be issued soon. That is another input, but other more significant inputs are required to alleviate the situation so adequately set out by Deputy Stanley.