Skip to main content
Normal View

Dáil Éireann debate -
Thursday, 23 Apr 2015

Vol. 875 No. 3

Priority Questions

Irish Water Funding

Barry Cowen


1. Deputy Barry Cowen asked the Minister for the Environment, Community and Local Government the timeframe for the announcement of the result of the EUROSTAT market corporation test of Irish Water; and if he will make a statement on the matter. [15771/15]

I seek an update as to when EUROSTAT will come back to the Government with its proposals as to the funding model for Irish Water. I am conscious that the Government has based its plan on the premise that it will get the spending associated with Irish Water off-balance-sheet. The CSO recently adjudicated that it should be on-balance-sheet. The Government is paying 1.5 percentage points over the rate the NTMA is paying for borrowing on a regular basis.

I thank the Deputy.

This not only defeats the purpose but also proves that, on-balance-sheet, the Government is paying 1.5 percentage points over the rate the NTMA is paying for regular borrowings on the part of the Government. When will EUROSTAT come back to the Government? Why has the delay arisen?

I thank the Deputy for his question. A key component of the strategy to establish Irish Water is that Irish Water will be classified as a market corporation under EUROSTAT rules and as a result will not, other than in relation to Government support, be included in the calculation of the general Government balance.

The CSO is independent and is responsible for engagement with EUROSTAT on such matters. Officials from my Department have met officials from that office and have provided the necessary information to facilitate this work. Early engagement with that office by my Department centred on understanding the rules by which a utility such as Irish Water would be considered a market corporation. I went into that in great detail. Based on this understanding, the Government is confident that the underlying funding model for Irish Water supports increased investment in the water sector through an off-balance-sheet classification of the utility, while at the same time providing for water charges which are affordable, clear and certain.

The Government remains absolutely confident that Irish Water will pass the market corporation test. However, as it is independent, this is ultimately a matter for EUROSTAT. The CSO has confirmed that a classification proposal on Irish Water is currently with EUROSTAT. The CSO has further stated that this is a closed process and that it is awaiting EUROSTAT’s final adjudication, which I expect in a couple of months.

I accept the Minister's answer and hear what he is saying. Unfortunately, towards the end of last year we were informed that by February or March we would have a resolution to this issue and a decision by EUROSTAT. The Minister is obviously not aware of the reason for the delay because he believes the Government has adhered to all the rules.

In the absence of legislation to give effect to stronger powers on the part of Irish Water to get payment from those who refuse to pay, when does the Minister expect to introduce legislation to give more powers to Irish Water in that regard? Is EUROSTAT awaiting the outcome of that process? Irish Water then will be perceived to have an absolute income stream, which is currently absent, in the form of adequate legislation to empower it to force people to pay, which goes against the commitment the Minister gave previously that no enforcement would be forthcoming in the form of turning off taps and so forth.

I thank the Deputy.

That appears to be a gap in the Government's presentation to EUROSTAT. Also, the €100 grant is nothing more than a kickback, to use some of the language that has been expressed about other issues that have been discussed this week.

Sorry, Deputy. We are over time.

The €100 grant is very much welcomed by many people I have met in Offaly.

It is to turn on the tap.

There is no correlation between legislation proposed to be introduced in the very near future to address the issues he raised and EUROSTAT's decision. EUROSTAT is completely independent and deals with the CSO here in Ireland. When it makes its decision is a matter for that organisation. I cannot dictate; I can just give guidance in this House on what I expect to the best of my ability, as I have always done. Ultimately it is a matter for EUROSTAT as to when that decision is in place. There is no delay. This is a matter for EUROSTAT based on the information provided to it through the CSO. As I said, I expect that in a couple of months.

I think it was the right decision-----

I thank the Minister.

-----to ensure that people's taps could not be turned off. However, I expect legislation on enforcement mechanisms to be brought before the House in the coming weeks.

Can the Minister confirm, and does he think it is ironic, that with regard to the borrowing of €300 million that Irish Water obtained in the markets at the end of last year, the rate it is paying - and, ultimately, that consumers will pay - is 2.5%? Is it the case that the rate at which the Government is borrowing on a regular basis through the NTMA is just 1%? Despite all that has been spent - some would say wasted - in getting us to this point, the consumer will be expected to pay 150% more than if it was on-balance-sheet and within general taxation.

No; I do not think it is ironic at all. It is done with the best information available. Irish Water gets the best rates it can.

It continues to consider various other ways of borrowing and is very close to some more success in that respect. Ultimately, we believe, Irish Water will be off-balance-sheet. It is absolutely necessary for Irish Water to be in a position to borrow at the scale required so that it can put over €6 billion into the network in the future to deal with all the issues concerning water of which this House is well aware, and the fact that it was not a priority for many Governments across parties in recent decades.

Irish Water Funding

Brian Stanley


2. Deputy Brian Stanley asked the Minister for the Environment, Community and Local Government the amount he expects Irish Water to collect in the current year from domestic water charges, and separately from commercial water charges; and if Irish Water will require further subvention from the Exchequer. [15838/15]

My question is about the amount to be realised from domestic water charges and separately from commercial water charges. Earlier this year, Irish Water told me that it needed €899 million this year for operational costs. There seems to be a question about whether the sums will add up to that amount. Will the Minister address those two issues?

I thank the Deputy for the question. The establishment of Irish Water, which is an integral component of the Government’s water sector reform strategy, will lead to lower costs and improved services in the future, providing much better outcomes for customers and the environment. Irish Water is being funded by a combination of domestic and non-domestic water charges, Government support and the raising of debt on capital markets.

The main aspects of the Irish Water funding model are set out in a detailed fact sheet published on my Department’s website. In 2015, Irish Water expects billed income from domestic customers to total €271 million and income from non-domestic customers to total some €229 million, giving a total billed income from customers of €500 million.

Government funding is by way of operational subvention, loans and capital contributions. Specifically, the Government will provide a €399 million operating subvention to Irish Water in 2015. This subvention will be paid in respect of the child allowance of 21,000 litres per child per annum, a product subsidy and the capping of domestic water charges at the rates set out in the Water Services Act 2014.

I thank the Minister for his reply. At Question Time last month he told me the billed amount for domestic water would be €270 million. He also told me that in a written reply. That suggests that he is depending on a 100% compliance rate. He is correct in the sum that Irish Water quoted earlier in the year - €271 million in domestic charges and €229 million in commercial charges, giving €500 million. There will be an Exchequer subvention of €399 million for operational day-to-day costs, but that ignores the fact that there will be a substantial non-payment of these charges. I anxiously await the legislation which the Minister says he is bringing in soon.

Ignoring the water conservation grant and assuming the Minister will do a smoke-and-mirrors job with that, there is a gap in collection because the commercial water rates collected were far lower in the last year for which there are figures.

There will be no smoke and mirrors in any aspect of this or the water conservation grant. The domestic revenue to be delivered is €271 million. There will be several measures in place to enable people to pay, and they will be facilitated by flexi-pay options, etc. There will also be enforcement mechanisms in the legislation, which the Deputy awaits eagerly and which will be introduced in the coming weeks, to ensure that the €271 million will be delivered. We absolutely need that to happen and to ensure that everybody makes their contribution to the charges. The charges outlined are very fair and reasonable.

What the Minister has just said conflicts with his reply during the previous Question Time. He said €271 million was the billed amount. He also said that in a written reply. That is for domestic water charges. The last year for which I can obtain figures for commercial water charges is 2012, when the amount realised was €180 million. The billed amount was €187 million. Local authorities were fairly effective in that year at collecting it. The shortfall between the billed amount and the amount yielded was only €7 million. If Irish Water hopes to get €229 million, there is a gap of €50 million. There will be a significant non-payment, regardless of whether the Minister agrees with that or not. The Minister does not and I do, but that is beside the point. There will be a shortfall of somewhere in excess of €100 million. Will Irish Water look for more money from the Exchequer and this House to make up the shortfall in operational costs? How will that shortfall be made up and will the Government meet the EUROSTAT test, which has been deferred yet again?

The EUROSTAT decision has not been deferred. That is a matter for EUROSTAT. It is an independent body and its independence is critical and necessary. I just want to nail that one.

It has been moved twice.

That is a matter for EUROSTAT. It is not a matter for this Government. I hope the Deputy knows that. It is up to EUROSTAT to make its decisions.

There will not be a shortfall in respect of the figures the Deputy quoted. Legislation on enforcement will be brought through the Houses to ensure that the income I stated, €500 million, will be delivered. I am very confident of that. I am also quite pleased at the number of people who, since the 361,000 bills were received around the country last Monday, signed up immediately. It shows that the people are coming with us and understand that it is absolutely necessary to go down this road.

Housing Provision

Richard Boyd Barrett


3. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government the reason he considered it appropriate to allocate a target for social housing provision in all four Dublin local authorities that is below the national average target of 25% - 20% in Dún Laoghaire-Rathdown, 21% in Dublin City Council, 23% in Fingal County Council and 23% in South Dublin County Council - considering the crisis is at its worst in our capital city; and if he will make a statement on the matter. [15839/15]

Figures were released earlier this week showing that there has been a disastrous 55% increase in the number of homeless families and children in the past year. Most of those are in Dublin - 911 children, or 411 families - on top of an already disastrous homelessness crisis in Dublin for individuals, families and young people. How can the Minister say he is taking serious action to deal with this crisis when what he promised goes nowhere near dealing with it, and the allocations he has made for new houses in Dublin are lower in percentage terms than the national average, according to his own figures?

I thank the Deputy sincerely for asking this question. Social housing is a key priority for the Government, and the social housing strategy targets the supply of 35,000 additional social housing units. I have managed to get €4 billion in the teeth of very difficult economic times. Even the Deputy, I hope, would acknowledge that that is a substantial amount of money to get in these difficult times. It is an absolute priority for me. The targets for local authorities that I announced recently are fully in line with those in the social housing strategy, which were developed having regard to the nature and scale of social housing need, as measured by the most recent statutory assessment of housing need. In total, some 22,900 units are targeted for delivery in the 2015-17 period, 7,500 through capital-funded schemes and 15,400 through current-funded programmes.

A key reason for the variation in the impact on local housing lists lies in the variation in the levels of housing need locally. Certain areas have lower numbers on housing lists, with a consequence that the targets set for such authorities have a relatively high percentage impact on the lists. Conversely, while other authorities had considerably higher targets set for them, including the Dublin local authorities, the impact is proportionally not as high given the number on the housing lists of those areas.

In overall terms, the targets I have announced for Dublin are extremely ambitious and challenging. I am determined that they will be achieved. Delivery on these targets will have a major impact on the housing waiting lists in the four local authorities concerned and reflect the fact that addressing social housing need is accorded the highest priority by the Government. In that regard, Dublin is ultimately the highest priority.

For the third time since I entered the Dáil in 2011, I have brought families, who were directly affected, into the Visitors Gallery. They are either now homeless, threatened with homelessness or have been on the housing waiting list for ten, 12 or 13 years. Many of them now sitting in the Visitors Gallery are in absolutely dire circumstances.

The figures released today by the Dublin Housing Executive show that the situation has become worse by 55% in the last year, despite all the announcements. Frankly, somebody is telling porkies about these figures. When the Minister says there is €3.8 billion extra it sounds like a lot, but it is €1.5 billion. The rest is coming from the existing social protection budget in the form of RAS and leasing. In other words, people will stay exactly where they are in precarious circumstances. Meanwhile, landlords are evicting people daily because they can get higher rents in the private market. It is bogus and a fantasy to say that there is this big extra injection of money.

A question please.

In these announcements, the Minister promised a national average 25% reduction in the housing list but it is not even being met in Dublin. The allocation is lower in Dublin where the housing crisis is at its worst. How can the Minister explain this?

More than €500 million will go to Dublin between now and the end of 2017. The Deputy can challenge the figures all he wants, but that is real money. I have some news for the Deputy concerning the targets he has so eloquently addressed. As regards the targets set for the four local authorities in Dublin, we asked them all what they wanted. We met with them and discussed it in detail. The Dublin social housing strategy is separate to everything else we do because of the issues in the capital. When we received their wish lists, I set higher targets for them than they had sought. That is how much we are putting into Dublin. Some €500 million is going into Dublin until the end of 2017.

As regards the Deputy's comments on homelessness, we have put together a huge package to help homeless people. Unfortunately, it would be impossible to have a utopian package that addresses everything immediately. However, if the Deputy asks Alice Leahy of Trust and many others whether they have seen a dramatic impact as a result of it, they will certainly tell him that they have.

In recent months, the grim facts of a dramatic increase in families, including children, being driven into homelessness speak for themselves. I will give an example concerning targets in my own area. In a letter sent to Dún Laoghaire-Rathdown County Council, the Minister mentions a target of 681 new houses. When one breaks it down, however, there are only 300 new houses, or less. The rest are leases, RAS or HAPs, which are not new council houses. Much of it is not new money either.

The housing waiting list in Dún Laoghaire is growing by 100 per month. The Minister is going to give us 300 new houses over three years, when 1,200 people are joining the list in a year. That means the list will be a million miles longer in a few years if this is all the new social housing construction the Minister can provide. It is not even a drop in the ocean. We will not even be standing still and the crisis will get worse.

I have secured the largest budget for social housing in the history of the State. The Deputy referred to Dún Laoghaire. We have had a substantial engagement with the local council there. However, he omits the fact that there is a mix, including purchasing units in some cases. The Deputy has often spoken about boarded-up social houses, which we call voids. They are being turned around more quickly. We have a mix in each local authority based on their analysis of how many units can be turned around quickly through that combination, be it by building, purchasing, leasing or voids. This is real money and I resent the fact that the Deputy thinks it is not so.

Is it existing money?

This is real money that is fixed and ring-fenced for this purpose. It will have a dramatic impact. I want to see it being turned around as quickly as possible. We have weekly meetings with the Dublin housing taskforce and I also chair a monthly meeting with all the relevant parties to ensure that this situation is being turned around as quickly as possible.

The Deputy should remember that we inherited a situation where houses were not being built for decades. Ultimately, it takes time to turn that around.

Rural Development Programme

Éamon Ó Cuív


4. Deputy Éamon Ó Cuív asked the Minister for the Environment, Community and Local Government the progress made to date with the roll-out of the Leader programme and the social inclusion and community activation programme; and if he will make a statement on the matter. [15837/15]

I wish to ask the Minister of State, Deputy Ann Phelan, when the social inclusion and community activation programme will be fully operational. What impact will the legal challenge to the way that programme was rolled out have on the progress of the programme? Can the Minister of State also say when she expects the full set of Leader companies to be chosen and operational? When does she expect them to be in a position to roll out the first grants under the new Leader programme?

The Leader element of the Rural Development Programme 2014–2020 will provide €250 million in financial resources to support the development of sustainable rural communities.

As the Deputy will be aware, under the EU regulatory framework governing the Leader element of the Rural Development Programme 2014-2020, each EU member state must conduct an open and transparent process to select both the local development strategies and local action groups for each sub-regional area.

Accordingly, my Department is conducting a two-stage process. The first stage, which is an expressions of interest, EOI, stage, was recently launched. Any entity wishing to be considered as a local action group for their area has until 15 May 2015 to submit an EOI.

Local action groups and local development strategies will be selected by an independent selection committee established specifically for that purpose. Entities that are successful in the first stage of the process will be invited and supported in stage two of the process, which involves the design of a local development strategy for their area. I expect that some local development strategies will be operational and that funding will be available for them by autumn 2015.

My Department’s local and community development programme, LCDP, concluded on 31 March 2015 and the new social inclusion and community activation programme, SICAP, was rolled out across communities on 1 April 2015.

SICAP was subject to a public procurement process. Tenderers have now been informed of the outcome of their tender. Local and community development committees, LCDCs, have finalised contracts with the winning tenderers in all but two areas of the country, where interim arrangements to support business continuity have been put in place. I can confirm that funding has been forwarded to SICAP implementing bodies and actions under the programme have now commenced.

The primary focus of the Department is to ensure that front-line services, particularly those focused on the needs of the most socially deprived communities, are protected. I am confident the new programme will continue to provide key supports to those most in need in our communities.

In order to support entities making expressions of interest, my Department has been organising information sessions. Such sessions were held in Nenagh, Tullamore and Sligo last night.

I understand a judicial review has been sought in respect of the decision relating to the roll-out of the social inclusion and community activation programme in County Galway. Will the Minister of State clarify whether she will continue to provide interim funding to the existing companies for the duration of this judicial process? Are discussions taking place between her Department and the companies to try to resolve the issues at stake without having to go to the great expense, on both sides, of a court case?

It has not been possible to finalise SICAP contractual arrangements in Counties Galway and Meath at this time. Legal issues have arisen in both cases and continue to be followed up. We are very committed to resolving these issues. However, there is a legal process under way, tenders were sought and won, and I am restricted in what I can say at this time.

I understand that in a case such as this, discussions sometimes take place outside the legal process to resolve the issues at stake. In fact, cases are often sorted out on the steps of the court, even after enormous expenses have been incurred. In such cases, resolution is achieved by way of negotiation rather than through the legal process, the latter involving great expense for both sides. Is the Minister of State willing to enter into discussions with a party which has serious concerns, namely, FORUM Connemara, in an effort to resolve the issues, rather than bringing everybody through a very expensive court case which may or may not go in the Department's favour? This matter is urgent given that leave for judicial review to ascertain whether there is a substantive case has already been granted.

I assure the Deputy that my officials and I are doing everything we can to resolve these matters. I am precluded from interfering in the legal process in any way, but we are doing all we can outside that process. Nobody is ignoring the issue; it is receiving the fullest attention within the Department.

Housing Assistance Payments Implementation

Richard Boyd Barrett


5. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government the research he has carried out regarding the viability of rolling out the housing assistance payment scheme to 75,000 families and persons by 2020, in view of the already considerable difficulty in getting landlord agreement for the existing rent allowance scheme; his plans to deal with the local authorities' duty of care to tenants under the housing assistance payment scheme in the future, particularly in regard to security of tenure and standards of accommodation; and if he will make a statement on the matter. [15782/15]

Notwithstanding the bogus propaganda that €3.8 billion has been allocated for the provision of 110,000 social housing units, the reality is that €2.3 billion of that relates to the existing rent allowance budget of the Department of Social Protection. That is a fact, as verified by the Department in the reply to a parliamentary question I submitted earlier this week. Two thirds of the houses the Minister is promising come under the housing assistance payment, HAP, scheme, that is, they are properties rented out by private landlords. When landlords are increasing rents and evicting people on a daily basis, how can the Minister seriously expect us to believe the HAP scheme and the rental accommodation scheme, RAS, that he is promising will deliver the housing that is desperately needed by people such as those in the Gallery today?

I thank the Deputy for his question. As outlined by the Minister, the implementation of the HAP scheme is a key Government priority under the Social Housing Strategy 2020, which sets out a range of ambitious targets. The scheme is vital if we are to meet housing demand, which, as the Deputy rightly points out, is increasing. The funding that has been committed under the social housing strategy is evidence of our commitment in this area. More than €3 billion has been ring-fenced for the provision of a mixture of housing solutions. All Deputies will know from their constituency clinics that local authorities have not been building houses for the past 12 years. We came into government at a time when houses were simply not available in local authority areas and voids were not being turned around quickly enough. The Minister and I have given a major focus to improving the turnaround of voids. For the first time, we are measuring how long these turnarounds are taking and how much they are costing. That will help to reduce the housing lists, but it will take time.

The construction of new homes, likewise, will take time, because it involves the issuing of tenders and so on before construction can commence. Huge investment is going into that area. In the meantime, we must put in place other solutions, one of which is the HAP scheme. I would expect the Deputy to welcome the funding we are putting in place to bring benefits to tenants in terms of security of tenure, improved accommodation standards and so on. Every local authority that administers a HAP scheme must ensure properties are inspected and brought up to standard within eight months. Something had to be done to bridge the gap in accommodation provision until the new house-building programmes commence. The HAP scheme is working very well in that regard in seven local authority areas and is about to be rolled out in 12 more areas around the country. I am confident that this component of the social housing strategy will help to address the demand to which the Deputy referred.

Hundreds of families are being evicted on a monthly basis by landlords who are running away from rent allowance arrangements with local authorities. At any point in time across the Dublin local authority areas, dozens of RAS landlords are evicting tenants. How can the Minister of State expect us to accept that all these people will be brought into the HAP scheme? That is not going to happen. Will he at least admit that of the €3.8 billion allocated, €2.3 billion is for the existing rent allowance budget of the Department of Social Protection? The new funding being provided is actually €1.5 billion, and that is simply not enough. Indeed, it goes nowhere near dealing with the problem in the short or long term. What is required is new houses.

In the meantime, however, I can offer the Minister of State a solution to meet existing need. The National Asset Management Agency, NAMA, has €4 billion in cash. That is our money. Putting even half of it into an emergency programme of social housing construction, to commence immediately, and using whatever empty properties the agency has to provide emergency accommodation would go a good away towards addressing the need that is out there.

We all agree that housing is one of the most pressing issues in this country. The Government is committed to prioritising and resolving this issue. The Deputy, however, seems to be conveniently pointing to the worst-case scenarios. The Private Residential Tenancies Board, PRTB, is doing a great of good work in terms of raising awareness of tenants' rights. In fact, a campaign is under way, in conjunction with the Department of Social Protection, at the moment. I advise the Deputy and any citizen who has concerns in this area to visit the website, operated by the Money Advice & Budgeting Service and the Citizens Information Board, which sets out the legislation that is in place to protect people from eviction in cases in which rents have been hiked. That is not allowed to happen under existing law, and there is support and advice available for people in that scenario.

The Deputy is not giving local authorities the credit due to them for bringing thousands of people into successful rental accommodation schemes around the country. A report on the implementation of the HAP scheme has been submitted to the Oireachtas Joint Committee on the Environment, Culture and the Gaeltacht, and it is open to the Deputy or any Member to scrutinise that report to see what progress that has been made. Some 1,500 people are now successfully participating in the scheme in the seven pilot local authority areas. We intend to increase the participation rate to more than 8,000 by the end of this year when the next wave is rolled out in 12 local authority areas. Progress is being made and we would welcome the Deputy's support for it. There can be no permanent solution until the new houses are built. I ask the Deputy to acknowledge that on the floor of the Dáil this morning.

I work every day with a local authority that is firefighting in the face of this disastrous situation. The worst-case scenario is being experienced by the people in the Gallery, who represent only the tip of the iceberg that is the disaster unfolding in Dublin and other urban centres. I want to work with the Minister of State to find solutions, but we must be honest here. The numbers he gave in reference to the sign-up rate for the HAP scheme relate to existing rent allowance landlords. Nothing has changed for the people on housing lists, who will not get a council house as a result of these changes. A few landlords will sign up to HAP, but many of them are walking away.

Would you put your question please, Deputy?

How can the Minister seriously base the future housing strategy on the disastrous crisis we are facing in the hope that he will get tens of thousands of private landlords to sign up for these schemes when they are walking away from rent allowance or arrangements with local authorities?

I want to clarify one item for the Deputy. He said the €4 billion includes the housing assistance payment, HAP. There is €4 billion of capital committed to the year 2020. The Deputy said nothing has changed. A great deal has changed in the past year. The Construction 2020 strategy will address many of the deficits in terms of housing provision throughout the country. We are only now seeing the construction sector getting back to some level of normality in terms of construction. We were building 90,000 houses a year, which was unsustainable. We need to get that back to some level of sustainability. In addition, in the coming weeks the Minister for the Environment, Community and Local Government, Deputy Kelly, and I will announce hundreds of schemes throughout the country for direct build, the very schemes for which the Deputy is calling, but they cannot be built today or tomorrow. In the meantime, we have to bridge that gap through schemes such as the rental accommodation scheme, RAS, and the HAP because the houses cannot be "magicked" out of the air. That is what the Deputy is calling for but that cannot be delivered overnight so we have to provide for the very people he is talking about, and we will provide for them through the provision of RAS and HAP.

This will bring benefits in terms of certainty in rental standards administered by the local authority at the same differential rental rate as the local authority. These supports are in place. The Private Residential Tenancies Board is supporting people in private accommodation under threat of eviction. Also, the Department of Social Protection will engage with them on a case by case basis to assist them. I want to be clear that there is support for people under threat of eviction and we in the Government and the Department of the Environment, Community and Local Government will support them also.