Topical Issue Debate

NAMA Court Cases

Deputy Michael McGrath

I am pleased the Minister for Finance is present to discuss this issue. On 2 August last, the National Asset Management Agency, NAMA, was advised by a journalist from The Sunday Times that a senior executive in the agency, Mr. Enda Farrell, purchased a five bedroom house in Dublin last December from the agency's portfolio in a private deal without the property being put up for sale on the open market. NAMA's response was to appoint its internal auditor, Deloitte, to carry out a review of the transaction. The newspaper ran the story on Sunday, 5 August.

On the question of the property transaction, Deloitte subsequently found that the National Asset Management Agency approved the transaction without apparently realising that the purchaser was one of its employees. The agency stated the failure of Mr. Farrell to disclose the transaction was a breach of its internal procedures. Incredibly, it appears there is no explicit rule in place to prevent NAMA employees from entering into private deals to purchase agency properties. This position needs to change.

This story should have set alarm bells ringing in the National Asset Management Agency and Department. The response from NAMA, in appointing its internal auditor to carry out an investigation, was entirely inadequate. However, the story gets much worse. During the course of the review carried out by Deloitte, evidence was found that pointed to the removal by Mr. Farrell of confidential commercial information from the National Asset Management Agency. High Court proceedings were initiated by the agency in this regard and lawyers for NAMA told the High Court that the information had been taken in a premeditated way over a number of months. This raises a number of serious questions about the internal control and governance arrangements in the agency. How is it possible that information of such a commercially sensitive nature and pertaining to more than 11,000 loans, with a nominal value of approximately €74 billion and underpinned by approximately 16,000 properties, could be compromised in this manner? The very essence of the work of NAMA was potentially compromised by the breach of confidentiality surrounding this information.

It is my understanding that the information technology controls in the National Asset Management Agency prohibit the sending of e-mails to personal accounts, for instance, Hotmail, Gmail and Yahoo accounts. However, as the recipient e-mail address in this case was a professional services firm with which NAMA engages in some work, the e-mail left the agency and was received. Recently and belatedly, NAMA referred the matter to the Garda Síochána. On 5 August, the day this story broke, I immediately called for the matter to be referred to the Garda as it was always one for Garda investigation. Offences under the National Asset Management Agency Act are criminal offences. It was never adequate for NAMA to carry out an internal inquiry into the private sale of one of its properties to an employee without the property being placed for sale on the open market. In the course of the investigation into this matter it subsequently emerged that highly valuable commercial information had been potentially compromised. This issue is of extreme importance and goes to the heart of the role of the National Asset Management Agency. Members of the Oireachtas and citizens have placed their faith in the agency fulfilling its role. NAMA is among the largest - if it is not the largest - property portfolio owners in the world. It is entirely unacceptable to have information of this nature potentially compromised in this manner.

If, as the lawyers for the National Asset Management Agency have stated, this was done in a premeditated fashion over a number of months, it calls into question the governance and control arrangements in the agency. It is well past time the Minister appointed an independent person to find out exactly what took place in this case and carry out a root and branch review of the governance arrangements and control procedures that apply in the agency.

Minister for Finance (Deputy Michael Noonan)

I fully support the swift and decisive actions of the National Asset Management Agency, NAMA, in dealing with this allegation as there should be no question but that NAMA employees are working in the best interest of the taxpayer. NAMA became aware of the particular transaction involved on 2 August 2012. On 3 August 2012, NAMA instructed its internal auditors, Deloitte, to carry out a comprehensive investigation into the transaction. The Deloitte review established the sale of the property was transacted at market value as the sale price was in accordance with an independent valuation at the time of the transaction.

NAMA requires its entire staff to complete a disclosure under section 42 of the National Asset Management Agency Act 2009 outlining all assets, liabilities and interests which they hold. Each employee is also required to inform the agency’s chief executive officer of any change to his or her disclosure. He or she must also immediately inform the chief executive officer of any matter that could raise a question about his or her suitability to act as an officer of NAMA or that could result in an actual or potential conflict of interest with respect to his or her duties or obligations as an officer of NAMA.

However, the investigation found that the former employee did not disclose this transaction to NAMA at any time either prior to or following the transaction. During the course of the Deloitte investigation, NAMA also became aware that confidential data may have been taken without authorisation from NAMA by the former employee.

I wish to inform the House that a thorough investigation has now been completed. I am advised that the unauthorised disclosure was notified to An Garda Síochána and the Data Protection Commissioner on 12 September 2012 and that NAMA has provided, and will continue to provide, all information required by the Garda as part of this investigation.

I am also advised that NAMA has instituted legal proceedings against the former employee and his spouse seeking a number of reliefs including an injunction to prevent them from using, disclosing and-or dealing with confidential information. NAMA is also seeking several court orders, including an order directing the former employee and his spouse to provide a full account on affidavit in respect of all confidential information that either of them has removed from NAMA. This is to include the identity of all persons who have had access to the information or who have been made aware of its existence and-or contents and the identity of all persons to whom the information has been supplied.

These proceedings are within the jurisdiction of the courts and I am, therefore, not in a position to discuss them further. NAMA's swiftly instigated investigation demonstrates how seriously it viewed the allegations raised in early August regarding the purchase of a NAMA property by a former employee as well as the level of adherence to statutory and other disclosure requirements by the former employee.

I am also advised that NAMA already employs a wide range of measures to prevent unauthorised disclosure of confidential data. These include practical measures such as the deployment of e-mail monitoring technology to prevent e-mail attachments from being forwarded to personal and non-corporate e-mail accounts. IT controls also ensure that data cannot be saved from the National Treasury Management Agency, NTMA, network onto external storage devices such as USB keys, CDs, etc.

NAMA employees are bound by several statutory obligations in respect of the confidentiality of information to which they have access by virtue of their employment. These include obligations imposed under section 14(1) of the National Treasury Management Agency Act 1990 and under section 202 of the National Asset Management Agency Act 2009. NAMA staff are also subject to the provisions of the Official Secrets Act 1963. Contravention of these statutory obligations constitutes criminal offences and, under section 7 of the National Asset Management Agency Act, a person who commits such offences may be liable to a substantial fine, a term of imprisonment or both.

It is unfortunate that in spite of these wide-ranging controls and obligations, NAMA has suffered a breach of trust. I take comfort in the fact that as part of its review of Deloitte's findings, the board of NAMA will assess whether changes are required to NAMA's current data control and compliance procedures.

Deputy Michael McGrath

I thank the Minister for his response. However, I disagree with him that NAMA made a swift and decisive response once the information was brought to its attention. The Minister stated the contravention of provisions of the National Asset Management Agency Act are criminal offences. NAMA is not a competent authority for investigating possible criminal offences. This matter should have been referred immediately to An Garda Síochána as soon as it was brought to the agency’s attention. That is what I called for on 5 August. NAMA delayed by appointing Deloitte to do an internal review. Subsequently, only when further evidence emerged was the matter referred to An Garda Síochána.

The practice of NAMA engaging in the private sale of assets under its portfolio without putting those properties up for sale on the open market stinks. It needs to come to an end. Will the Minister make that one practical change immediately? As the Minister knows, the gentleman in question, Mr. Farrell, on leaving NAMA went to work for Forum Partners, a property management company, as its Ireland representative. I am making no allegation as to how information may or may not have been used. However, the potential was certainly there for invaluable commercial information to be used for commercial advantage for one or more parties.

What we need to get to the bottom of now is where all of this information ended up. This is information concerning over 11,000 loans with a book value of over €70 billion and 16,000 properties. Where is that information today? In whose hands did it end up? Since the information was leaked from the agency, is there any evidence of transactions from which persons could have commercially benefited? These questions need to be answered quickly. The Minister should carry out an independent review of what happened in this case, as well as into the wider control procedures and governance arrangements at NAMA. There was a catastrophic failure of procedures in this case. It could yet have potentially negative consequences for the agency and taxpayers. We need to get to the bottom of it and ensure nothing like this happens again.

Deputy Michael Noonan

When the Garda is investigating a matter and when it is clear it may become sub judice, everyone should be careful with the allegations they make. The Deputy has made several statements that are not correct. First, NAMA did not delay when this matter was brought to its attention. It first heard of this particular house purchase on 2 August. On 3 August, the day after, it got its internal auditors to carry out a comprehensive investigation of the transaction.

Deputy Michael McGrath

That is not good enough. That was a matter for the Garda.

Deputy Michael Noonan

No, it concerned the sale of a house. I have described what disclosures have to be made.

Deputy Michael McGrath

There was the use of internal information.

Deputy Michael Noonan

No, the Deputy should not interrupt me and allow me to put the facts on the record. He has made allegations which are not correct.

Deputy Michael McGrath

I did not.

Deputy Michael Noonan

The more serious matter was discovered in the course of the Deloitte evaluation of what happened. It was then the transmission of data was discovered which was subsequently referred to the Garda Síochána. On 3 August, NAMA had no idea there was another potential offence involving the transmission of confidential data. There was no delay in dealing with the matter subsequently when that matter came to light. The agency acted expeditiously and in accordance with the powers under the Act. We will see whether there was damage in the revelations or not because the investigations are proceeding. As soon as the facts are established, I will inform the House of what has come to light on a suitable occasion.

ESB Disconnections Policy

Deputy Regina Doherty

I thank the Ceann Comhairle for allowing me raise this matter which affects more than 300,000 people. Last year, 11,773 customers had their electricity cut off, of which 81% were families. Up to 70,000 customers are in arrears of more than 60 days and only 10% are in payment arrangements. ESB Networks told me last week that on average 300 families a week in the greater Dublin area are being disconnected. It then takes them an average of five days to be reconnected. The payment, for which these families must borrow, beg or find, also includes a €89 charge for disconnection, as well as a €89 one for reconnection. These are shocking statistics.

What directives does the Minister for Communications, Energy and Natural Resources believe the Government can put in place to encourage our various network suppliers to show more compassion to struggling families who are being cut off in far too high numbers? I suggest we examine a social energy tariff which they have in the UK. These schemes offer discounts to customers who are in need rather than the typical Irish case of offering discounts to the staff of the ESB.

The schemes of all energy suppliers in the United Kingdom are obliged to offer some social energy tariff to give discounted electricity bills to customers in need. Rules from the energy regulator, Ofgem, state social energy tariffs must at least match the cheapest deal on offer from the providers, including those online.

Should we encourage our energy suppliers to fund a not-for-profit helpline to offer advice and assistance on payment schemes, social energy tariffs, grants for home improvements and benefits to which customers might be entitled? I appeal to the Government to step in to ensure no one is cut off from his or her electricity supply as a result of a genuine inability to pay. I appeal to all agencies to co-operate with customers and start accepting new payment structures. Cutting off the electricity supply of families which are genuinely trying to meet their payments should not be an option. Customers are trying their best to be responsible, with thousands opting to have pay-as-you-go meters installed in their homes as a way of dealing with energy bills. However, this option is not on offer to those who are already in trouble, but these are the ones most in need of pay-as-you-go meters. Will the Government seriously consider addressing the three energy suppliers on this matter? This is happening on the day when Bord Gáis announced that it had to recruit 90 new debt collectors recently. We are focusing our energy in the wrong places. We need to be more compassionate. Energy suppliers must do everything they can to ensure the most vulnerable, those most in need, including struggling families, are helped and assisted to pay their bills. These are outstanding debts that most families want to pay in a structured and more stable environment.

Minister for Communications, Energy and Natural Resources (Deputy Pat Rabbitte)

I thank the Deputy for allowing me to address the main issue she has raised. The regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation, CER, an independent statutory body with no ministerial role or function in this matter. However, other than in vacant premises which account for approximately one third of disconnections, I am concerned about any level of disconnection to customers. The CER is a statutorily independent body established under the Electricity Regulation Act 1999 and has responsibility for overseeing the regulation of Ireland's electricity and gas sectors. It promotes competition in the electricity and natural gas markets in order that customers can ultimately benefit from competitive pressures and prices. It also protects the interests of customers, especially the disadvantaged and the elderly, by ensuring standards of services are set and codes of practice are in place to protect consumers. I am well aware that some consumers are having trouble meeting their electricity bills owing to challenges facing the economy at this time and the fact that gas and electricity prices are increasing as a result of a significant rise in the price of gas worldwide.

I had asked the regulator to work with all electricity and gas supply companies to implement initiatives to ensure disconnection for non-payment of accounts would not take place where customers were experiencing genuine financial hardship and had either entered into a payment plan agreement or had agreed to the installation of a pay-as-you-go meter, as appropriate. The code of practice with the regulator holds that if consumers install a pay-as-you-go meter or if they enter into a payment plan, they will not be disconnected. The meters are available, but we need to improve the rate of take-up.

The CER has introduced several initiatives in respect of a disconnections policy. These include updating the guidelines for the disconnections code of practice, reducing the costs and the allocation of the costs of disconnection and reconnection for domestic customers. Instead of the customer bearing the entire cost, these costs are now shared equally between the supplier and the customer. This is an interim measure effective until December this year. The regulator is also working with the energy supply industry on interim pre-payment solutions and has consulted on the challenges of so-called debt hopping with the industry and other interest groups. These groups include the MABS, the Society of St. Vincent de Paul and so on.

In October 2011 the regulator introduced a process of debt flagging into the change of supplier processes. Debt flagging will encourage customers and suppliers to address arrears in an upfront manner and hence prevent the accumulation of further debt and possible disconnection in the future. The regulator has also proactively facilitated a pay-as-you-go metering system, also known as a pre-payment meter, in the natural gas and electricity industries to allow customers to manage their bills more effectively. The pay-as-you-go metering system is being rolled out throughout the country by all suppliers. In addition to providing a useful budgeting tool for customers, suppliers are required to offer customers facing disconnection the option of a pay-as-you-go meter where this is suitable, instead of proceeding to disconnect the customer. In these circumstances the customer's outstanding debt is placed on the meter and repaid over time.

In late 2011 the regulator carried out an audit of the guidelines for the code of practice on disconnections to see if suppliers were in compliance. The audit ensured all suppliers had implemented the guidelines. In the case of all examined domestic customer disconnections, the suppliers had exceeded the regulator's requirements in terms of timing of communications to customers and the numbers of attempts made to engage with customers prior to disconnection.

Acting Chairman (Deputy Peter Mathews)

I am afraid the Minister has run out of time. We will move on to the supplementary question.

Deputy Regina Doherty

I have no wish to be argumentative, but do we genuinely believe the code of practice employed by the CER is actually working? Under the code, anyone who finds himself or herself with a difficulty in paying his or her ESB bill has the option of using a pay-per-hour meter as opposed to being cut off. Some 300 families are being cut off in the greater Dublin area every week. We are suggesting these 300 families are choosing to be cut off rather than using a pay-as-you-go meter. This makes no sense whatsoever. My information came to me by accident last week from a gentleman from ESB Networks who happened to be installing an electricity connection in a unit on the main street in Ashbourne. He was able to detail the differences between the three service providers. I suggest, therefore, that code of practice is not working. Will the Government arrange for some communication with the CER to ask those responsible to examine the cases of the 300 families most recently cut off in the greater Dublin area, why they were cut off and whether they were genuinely offered pay-as-you-go meters or the opportunity to pay their bill or the outstanding debt over a longer period? Will the Government ask the CER to reconsider the figure of €89 that people are charged for the luxury of having their ESB supply cut off and, more important, whether it will reconsider the figure of €89 they are charged to have it restored? While I appreciate we are now sharing costs, the price of the service being provided is outrageous for those who are already in considerable distress. There is no family in the country which is having its electricity supply turned off which is not in distress.

Deputy Pat Rabbitte

I am unsure of the provenance of the Deputy's information, but the fact is that the supply company is supposed to offer such a person the option of having a pay-as-you-go meter installed rather than disconnection. The accumulated arrears at the time are put on the meter and cleared over a period. It is important that the Deputy has raised this issue at this time of the year. The net point is that we should try to increase the uptake of pay-as-you-go meters or prepayment plans. Under the protocol, where these are in place, the supply companies may not disconnect. Many factors are involved. The supply companies, whether it be ESB Networks or Bord Gáis, although they are State companies, have a commercial remit and are now operating in a competitive marketplace.

I am concerned about the second point the Deputy made. That matter is covered in the remaining part of my script and relates to the length of time it takes to make a disconnection.

The agreement in place at present requires the disconnection to be carried out within two working days. I accept that a disconnection on a Thursday evening can be problematic and I will talk to the supply companies about that.

On the net issue, in circumstances where one third of all disconnections are vacant premises, one need not be too observant that there are plenty of vacant premises around the place for the reasons that we know. Some others are due to debt hopping - customers swapping from one supplier to another - and that issue must be addressed. In the cases of genuine hardship to which Deputy Regina Doherty refers, however, it is essential that those persons opt for the pay-as-you-go meter or enter into a pre-payment plan after which they may not be disconnected.

Acting Chairman (Deputy Peter Mathews)

I will allow Deputy Doherty ten seconds.

Deputy Regina Doherty

I will not even take ten seconds as it is merely a point of clarification. The second point was not a criticism of the service providers regarding the length of time it takes them to reconnect customers. It was a criticism because customers are not getting reconnected until they pay off their debt in full and it is taking families on average five days to beg, borrow or steal the money to pay off their debts in full. That in itself makes little of the code of practice allowing customers to pay off their debt on a pay-as-you-go meter.

Acting Chairman (Deputy Peter Mathews)

That was 25 seconds.

Pyrite Remediation Programme Issues

Deputy Thomas P. Broughan

As the Minister will be aware, I welcomed the publication of the report of the pyrite panel in June, given that it finally provided some recognition of the seriousness of the problem of pyrite-affected homes in north and west Dublin and, indeed, in the north mid-Leinster region. However, the position remains urgent. In a recent email briefing from the chairperson of Pyrite Action, Mr. Peter Lewis, he described how thousands of innocent people were living in houses and apartments which were literally crumbling around them. As a group representing affected homeowners, Mr. Lewis stated Pyrite Action was increasingly hearing stories of both potential dangers and received injuries as a direct result of living in buildings which were becoming increasingly damaged and unsafe. Recent reports include the skim on ceilings falling down and narrowly missing children, doors falling from kitchen cupboards and, in one case, a child was badly cut by a falling shower screen. Households are also being left with no functioning toilet. With the winter coming, families are wondering again about the safety of using gas fires and central heating given that pyrite causes radiators to come loose and moving floors buckle the pipes. Where there is damage to external walls or window frames, it is next to impossible to keep the heat in.

The report of the pyrite panel provides a valuable technical analysis of the unfolding pyrite disaster and it estimates that more than 12,250 ground floor dwellings in 74 estates across the country could be contaminated by pyrite. Of these, so far approximately 850 have made a claim with a guarantee provider and approximately 1,100 have been remediated or are in the process of being remediated.

However, there are some concerns that the report by Mr. Brendan Touhy and the pyrite panel may still underestimate the scale of the pyrite catastrophe. Over the years since 2007, I was given estimates of up to 60,000 units being affected.

Deputy Phil Hogan

On what basis?

Deputy Thomas P. Broughan

On the basis of reports of persons who had worked in the industry. There are 24 key recommendations in the report and that is what I really want to ask the Minister about. On publication, the Minister for the Environment, Community and Local Government, Deputy Hogan, gave important stakeholders, including the Construction Industry Federation, CIF, the Irish Insurance Federation, the Irish Banking Federation, the Irish Concrete Federation and HomeBond, a deadline of the end of September 2012 to come together and respond with a comprehensive solution for all pyrite-affected homeowners. There are five days to go until the end of September. Can the Minister give us an interim report on this and tell us whether all of the stakeholders engage with the process?

One of the striking notes in the report, as the Minister will remember, is that the experience of the pyrite panel in dealing with the financial, legal and insurance sectors was hugely disappointing. For example, the report states on page 105 that "the Panel was amazed to learn that little or no discussions about the pyrite issue and its resolution had taken place within the representative bodies (or, indeed, the professional institutions), prior to the Panel seeking the views of the relevant bodies." Will the Minister commit to give significant Dáil time in coming weeks to report on the outcome of these negotiations that he has been having with the representative bodies?

If there has not been full engagement by all the stakeholders involved, the report recommends the imposition of a levy on the industry to get the pyrite problem sorted. As the action group has rightly stated, if the stakeholders are not willing to provide a solution the levy must be imposed as quickly as possible. Has the Minister finalised plans for a process of imposing a levy on stakeholders who will not engage?

Recommendation 2 in the report proposes an identification system for clarifying affected housing of red, amber and green. As the Minister will be aware, red represents a house which requires immediate remediation, amber represents one which requires ongoing monitoring and green represents a house which requires no further action. Concerns have been raised, however, that all houses that have been identified as contaminated by pyrite will not be remediated. I understand, also from the Pyrite Action group, that the phrase, "significantly damaged" has yet to be defined and the campaign group believes that the owner of any pyrite-affected house whose damaged home is in the amber category will be left with a home that he or she will never be able to sell.

In addition, homeowners are worried that pyrite-affected homeowners are already being blacklisted by banks and insurers. The action group has asked that the Minister provide an immediate commitment to ensure that all homes containing reactive pyrite are systematically remediated and asks whether he has taken steps to ensure mortgage providers and insurers are not blacklisting developments.

Minister for the Environment, Community and Local Government (Deputy Phil Hogan)

First, I acknowledge the difficult situation that homeowners affected by pyrite problems have had to deal with over the past few years. While I have said many times that the State is not responsible for the pyrite problem, I believe I have a duty to assist in trying to facilitate a resolution and this was one of my key objectives in setting up the independent pyrite panel. My focus is to ensure the recommendations in the pyrite report are implemented in a way that delivers effective solutions for the affected homeowners.

The pyrite report provides a comprehensive framework to move forward and make progress towards providing solutions to what is a complex problem. I thank the members of the pyrite panel, chaired by Mr. Touhy, and all the stakeholders who engaged with it, including Mr. Lewis and other representative groupings in the northside of Dublin and in other counties. We now have a comprehensive picture of, rather than speculative figures on, the nature of the problem.

The report comments on the lack of engagement by stakeholders with homeowners in providing effective solutions for homeowners. It recommends the constructive engagement by the key stakeholders, including the construction and quarrying sector, insurance industry and banking and mortgage providers, in processes that will lead to a resolution for homeowners. Immediately on receipt of the panel's report, I met the key stakeholders and outlined to them my preferred option for a solution to the pyrite problem and the role I believe they should play in the resolution process.

Mindful of the difficult situations faced by affected homeowners and of the time they have waited for a resolution to the pyrite problem until I set up the panel, I set a tight deadline of the end of September for the stakeholders to come back to me with their proposals. There are still five days to go and I live in hope that they will come back with the proposals.

Deputy Thomas P. Broughan

The Minister has received nothing.

Deputy Phil Hogan

I have some correspondence. It would be disrespectful, if I set a date of the end of September, that Deputy Broughan would ask me to give an interim report.

Deputy Thomas P. Broughan

Okay.

Deputy Phil Hogan

I will not be found wanting in making decisions about these matters and I have not waited around for anybody to encourage me to do so.

As I have made abundantly clear, in the absence of credible proposals from the stakeholders, I will consider an imposed solution along the lines recommended in the report of the establishment of a resolution board which could be funded by a levy on the construction-quarrying sectors and the related insurance sector.

Work is progressing on the implementation of a number of recommendations in the report. The National Standards Authority of Ireland is working on the development of a testing and categorisation protocol for reactive pyrite in sub-floor hardcore material and a method statement to provide guidance for the remediation of pyrite-damaged dwellings. It has set up two broad-based technical standards committees with those who have the requisite knowledge and expertise in the particular areas and they have also sought written submissions from the public. Recommendations on the development of a mandatory certification system for buildings and a registration process for builders are currently being finalised by the Department under the building control reform programme that I announced last year.

Deputy Broughan is not a man to understate matters but there are not thousands affected by pyrite where their houses are crumbling. It has been identified by the panel and agreed by everybody that there are 850 houses in need of urgent remediation. There are other homeowners who have potential pyrite problems who have been identified and this is where the National Standards Authority of Ireland will be able to give the necessary assurance or otherwise. Certainly, we are conscious that one who has a potential pyrite problem does not want to escalate publicity about these matters because it has an implication for the value of one's property. We have a sensitive issue to deal with in respect of homeowners, particularly those who paid a great deal for those properties and who have mortgage problems arising from it.

We are working through these recommendations and next week I will review the submissions I received from the stakeholders.

I hope they come forward on a voluntary basis. Otherwise, I will go down the road, as indicated in the report, of imposing a solution.

Deputy Thomas P. Broughan

I welcome that final commitment from the Minister. Unfortunately, given the history of this horrendous disaster for many thousands of householders, it is incumbent on the Government to be prepared to take vigorous action.

With regard to the Minister's plans for property tax or the household charge for next year, and for budget 2013, recommendation No. 13 in the report of the pyrite panel is that pyrite-affected homes be exempt from the property tax until such time as those homes are remediated. Does the Minister agree with that recommendation? This exemption, while not a solution, should be granted immediately. Pyrite-affected developments should be treated as unfinished estates, which is what they are. Therefore, it is reasonable that there would be an exemption in this regard. Is it the Minister's intention to provide for that this year and with regard to any future property tax?

Can the Minister give us an update on the NSAI's examination of pyrite testing standards, which he mentioned briefly in his response, and on the development of a remediation method statement for the certification of pyrite homes? As the Minister will accept, it is key for the future that householders will be able to provide a certificate to a purchaser stating the house was remediated fully and is in good condition. This is a key part of the Minister's responsibility. Is the Minister going to provide upfront funding to any proposed remediation scheme to reflect the State's failings in this matter? He has said it is not the State's responsibility, but the local authority and the State were there when these huge building programmes were undertaken, when we were building perhaps one third of the total output of countries such as the United Kingdom and approximately four or five times the output of countries such as Sweden, and when regulations were not being implemented.

A recent Fingal County Council notice sent to me, 216A, related to the quarry at Bay Lane, Kilshane, Dublin 11. Astonishingly, it found that no further action on planning grounds was required by the owners, Irish Asphalt Limited. Fingal County Council sent me a copy of that finding, but did the Minister receive a copy of it? As the Minister is aware, there was consultation on the Fingal quarries recently, but the quarry at Bay Lane, Kilshane, was the main interest.

I welcomed the Minister's announcement of an information helpline and an e-mail contact address for families affected by pyrite. How have people used those contacts and has the Department been able to help them?

Deputy Phil Hogan

The Deputy has put a number of questions. I established the free telephone line to help people, as I understood from everybody, including the Deputy, that there were thousands of people concerned about and affected by pyrite. However, the Deputy will be surprised how few people rang the free telephone line - fewer than 40. This does not indicate that it is a serious concern for thousands of people. I know there are some hundreds affected, but there are certainly not thousands. If there were, they would be ringing in for information.

Deputy Thomas P. Broughan

The issue might be with their solicitors.

Deputy Phil Hogan

It was an eye-opener for me and a disappointment that there were not more people interested in the report, but perhaps the Deputy was not aware of that before now.

The Deputy has asked me to provide details of a scheme on which I have not come to any conclusions yet, because I am waiting for stakeholders to come back to me. Therefore, I will not provide details here. The NSAI and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, have that responsibility and, to be fair, the Minister responded immediately by setting up the process whereby the NSAI could generate a standardised test so that we can know once and for all whether there is pyrite.

The property tax is a matter for the Minister for Finance. I have submitted a report to him for consideration in the context of the budget and the issue mentioned by the Deputy concerning the recommendation in the report can be considered in that context.

Deputy Thomas P. Broughan

Would the Minister be in favour of or sympathetic to that submission?

Deputy Phil Hogan

I will not get walked into that. I will take on board positive and constructive suggestions on many issues when it comes to the budget discussions. I have every confidence in the Minister for Finance, Deputy Noonan-----

Deputy Thomas P. Broughan

The Minister is at Cabinet.

Deputy Phil Hogan

Arising from my experience in 1995, the Deputy would not expect me to respond on budget-related matters. I resigned on that occasion and did not get much sympathy from the Deputy or anyone else. Therefore, I will not walk into that again.

The State was not liable in regard to this matter, but I decided that the Government and the Minister for the Environment, Community and Local Government of the day should feel in some way responsible for helping homeowners. That is what I am doing. No other Minister had contemplated this previously.

School Transport Availability

Deputy Charles Flanagan

I wish to convey a deep sense of anger, frustration and annoyance on the part of hundreds of parents throughout County Laois at the consequences of the recent school transport changes. I refer in particular to the parents of students attending Heywood community school in south County Laois. I remind the Minister of State that this school was founded in 1990 as a result of a forced amalgamation by the then Department of Education of four schools, the Salesian college Ballinakill - the site of the current Heywood school - the Brigidine convent, Abbeyleix, Abbeyleix vocational school and the Presentation convent, Durrow.

The catchment area of the new Heywood community school was drawn up in accordance with the catchment areas of the four former schools. This was agreed at the time, and I was part of the negotiations as a Deputy for Laois-Offaly. I remind Members that this was not an easy amalgamation. It was mandated by the Department and it took some time to bring about the support of the parents, students and people of County Laois. Now we have seen that agreement unilaterally torn up by the Department of Education and Skills in a way that has given rise to serious frustration. Already, the school has lost six first year students. Three students from the village of The Swan, in County Laois, have no bus ticket. Parents in the Raheen, Shanahoe area of County Laois are in dismay, as they have been told that their children must attend school in the large urban area of Portlaoise.

We are seeing unilaterally on the part of the Department of Education and Skills a breaking of the traditional links between rural areas and rural schools and a breaking of the historic links between rural families and their schools. Students with brothers and sisters attending Heywood community school, which currently has approximately 700 pupils - one of the largest secondary schools in County Laois - have been told they must attend another school. Students in south County Laois have been told they must attend schools across the border in County Kilkenny. I mean no disrespect to the people of County Kilkenny, but I urge the Minister to share my sense of frustration at students being told they cannot avail of school transport and that they cannot attend their local school - a school with 700 students which was the result of a forced amalgamation and the closure of three schools - despite the guarantees given. Students on the other side of County Laois are being told they must attend school in the larger urban area of Portlaoise. Again, Portlaoise is many miles away from them and has no historic or traditional links for them.

I want the Minister to review this matter. I want him to comment in particular on the mistakes that have been made, with particular reference to the measurement of the areas. My information is that the measurements ascertaining the revised catchment districts refer to the old school in Portlaoise, which is at least 1,000 m from the new school. The Minister will be aware that parents enrol students in secondary schools in January and buy uniforms, books, tracksuits, iPads - in the case of Heywood - and so on. They have already attended to these needs by the time they are told in August that transport is being cut and that the students are in the wrong school. This is unacceptable and I ask the Minister to address the issue.

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

I thank the Deputy for raising this matter. The school transport programme is a significant operation. Bus Éireann, which manages the programme on behalf of the Department, covers more than 82 million km per annum as it brings children to and from school. In the last school year, approximately 114,000 children, including more than 8,000 with special educational needs, were transported on a daily basis to schools throughout the country. The school transport network involves approximately 4,000 vehicles, which between them cover more than 82 million kilometres each year.

The Deputy is referring to the changes to school transport eligibility for children attending post-primary schools which took effect from the beginning of the this school year. The main objective of the Department's school transport scheme is to support the safe transport to and from school of children who would have difficulty travelling, for reasons of distance, to their nearest school if such transport were not supported. That is the ethos that pertained when the school transport system was initially introduced and it is the ethos that pertains to this day. Changes in the post-primary school transport scheme were announced in budget 2011 by the Fianna Fáil-Green Party Government. As a result of one of the changes that took effect from the start of this school year, the use of the catchment area system as a means of determining eligibility ceased for all pupils newly entering a post-primary school. From the start of this school year, school transport eligibility for all new pupils entering a post-primary school is determined by reference to the distance they reside from their nearest post-primary school or education centre, having regard to ethos and language. This eligibility criterion will be applied equitably on a national basis.

In general, children who were eligible under the former catchment boundary area system will retain their transport eligibility for the duration of their post-primary education cycle, provided there is no change to their current circumstances. Siblings of these children and other children who are not attending their nearest school may apply for school transport on a concessionary basis only in accordance with the terms of the post-primary school transport scheme. In order to allow parents ample time to consider the school options, a 20-month gap was allowed between the announcement of this measure and the time when parents needed to apply for school transport for this school year. In addition, these changes were posted on the Department's website in October 2011 and the updated scheme was made available on 1 February 2012. In addition, the Department contacted post-primary schools and the relevant education partners directly on two occasions to advise them formally of the changes.

The general approach of the Department to the planning of school infrastructure is to plan on the basis of attendance of pupils at their nearest primary schools. Consequently, those primary schools feed into attendance at the nearest post-primary schools or the nearest post-primary centre generally. The changes announced in post-primary school transport services are in line with this approach and will ultimately result in a more efficient and cost-effective scheme. While it is the prerogative of parents to send their children to the school of their choice, eligibility for school transport is to the nearest school, having regard to ethos and language. Deputy Flanagan used the phrase "local school" on a number of occasions. I suggest that when we are organising the school transport system, the phrase "local school" must mean the nearest school to one's home. That is particularly true at this time of severe economic difficulty. If the Deputy has an issue with the system of measurement used by Bus Éireann to assess exactly how far a school is from a person's home - I gather he has - I will work closely with him to ensure measurements are taken to determine eligibility on a fair and accurate basis.

Deputy Charles Flanagan

I thank the Minister of State for his reply. He referred specifically to transport "on a concessionary basis" in accordance with the terms of the scheme. I ask him to elaborate on the future of the concessionary scheme. Could a student who has attended a school for a year find himself or herself without any transport to that school? Does the Department envisage that a student in such a position would have to change to a different school midstream, perhaps at the start of second year? Is he aware that private buses can cost more than €900 per annum? How many mistakes have been accepted by the Department in cases involving this specific school? Can he confirm that the measurement used by Bus Éireann relates to a school that is no longer situated at Tower Hill in Portlaoise but is now situated 1,000 metres away? If that is the case, it indicates to me that the process is not accurate. What has the Minister of State done since this issue was first brought to his attention after the school year started at the end of August? How many mistakes have been found by the Department? Will the Minister of State accept that the measurement is fundamentally wrong? Bus Éireann's measurement relates to an area that is 1,000 metres from where the school is now situated. I am seeking clarification on this matter. The area of Portlaoise that is used for the purposes of measurement is Tower Hill, but the school there has been closed for more than a year. The new school is located at Borris Road in Portlaoise, which is at least 1,000 metres from the former site at Tower Hill.

Deputy Ciarán Cannon

Bus Éireann has tried as best it can this year to accommodate children on concessionary seats on buses that serve children who are eligible for Heywood College and a number of other schools across the country. Parents should be aware that these seats are made available on a concessionary basis. If they choose to use them, there is no guarantee that the concessionary option will remain open to them in the future. Parents will continue to have the option of accessing school transport to their nearest school, if they choose to do so. The Deputy also asked whether mistakes have been made. My understanding is that when the distance between a child's home and his or her school is disputed, Bus Éireann uses a specially equipped vehicle that can accurately measure - to within a metre - the exact distance between the child's home and the school. Deputy Flanagan contends that Bus Éireann used the wrong location within Portlaoise when making the measurement in this instance. I will undertake to interact with Bus Éireann at the earliest possible time tomorrow morning to ensure such a mistake has not been made. If it has been made, it will be rectified immediately.

Deputy Charles Flanagan

I thank the Minister of State.

Dáil Éireann debate - Tuesday, 25 Sep 2012