JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION debate -
Wednesday, 26 Oct 2011

Rent Supplement Scheme and Rent Allowance Scheme: Discussion with the Departments of Social Protection and the Environment, Community and Local Government

Chairman

Before we start our public session, on behalf of the committee, I offer our sympathy to Deputy John Halligan on the death of his mother, who passed away a day or two ago.

I welcome Ms Helen Faughnan, assistant secretary, and Mr. Kieran O'Dwyer, principal officer, from the Department of Social Protection, and Mr. Michael Layde, assistant secretary at the planning and housing division, and Mr. Eddie Lewis, principal officer at the social housing supply section, from the Department of the Environment, Community and Local Government.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I ask Ms Faughnan to begin the briefing on progress made in increasing the rates of transfer from the rent supplement scheme to the rental allowance scheme, otherwise known as RAS.

Ms Helen Faughnan

I thank the committee for the opportunity to appear before it today to discuss the transfer of clients from rent supplement to the rental accommodation scheme. While the RAS is the responsibility of the Department of the Environment, Community and Local Government, the Department of Social Protection has a key role in ensuring the continuing success of RAS by providing the relevant details of claimants of rent supplement who have been in receipt of the payment for more than 18 months.

I propose to give a quick overview of the rent supplement scheme to members. The purpose of the scheme is to provide short-term income support to eligible people living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. The rent supplement scheme has experienced a dramatic increase in the number of people benefiting from it over recent years. There are currently almost 96,000 claimants benefiting from rent supplement, an increase of 59% since the end of 2007. Expenditure has increased by 32% from €391 million in 2007 to €516 million in 2010.

The scheme's main purpose is to address eligible people's short-term accommodation needs while they are temporarily unemployed. However, more than half of current recipients - approximately 51,000 - have now been in payment for more than 18 months. Details of these cases are provided to the Department of the Environment, Heritage and Local Government on a quarterly basis. The latest figures from that Department indicate that from 2005 to the end of September 2011, local authorities transferred more than 36,000 households from rent supplement. Of these, approximately 20,800 were housed directly under RAS and a further 15,300 were accommodated under other social housing options.

It was initially expected that when RAS was fully implemented, approximately 30,000 individuals would transfer from rent supplement to long-term housing solutions in local authorities. This 30,000 target has been reached and exceeded. However, due to the increasing demand for rent supplement, the numbers on long-term rent supplement have remained high.

Significant changes to the means test for rent supplement were implemented in 2007 to allow people to return to work and retain the rent supplement entitlement as long as they have been approved for RAS accommodation. Under these measures, a person on rent supplement who is accepted as having a housing need under RAS may engage in full-time employment and still be considered for payment of rent supplement, subject to satisfying the standard means test. Prior to this, with limited exceptions, a person in full-time employment, that is, 30 hours or more, would not have been entitled to rent supplement.

To encourage more people to take up RAS offers from local authorities, changes were made in the two budgets in 2009 to better align the minimum weekly contribution required by rent supplement tenants with rents payable under the RAS tenancies. Our Department continues to work closely with the Department of the Environment, Community and Local Government in ensuring RAS meets its objectives while enabling rent supplement to return to its original role as a short-term income support.

The Government has also tabled a new scheme to deal with long-term reliance on rent supplement - the housing policy initiative - which was launched on 16 June by the Minister for the Environment, Community and Local Government and the Minister of State with responsibility for housing and planning, Deputy Penrose. A multi-agency steering group has been established to finalise proposals and operational protocols for the transfer of responsibility for persons with long-term housing requirements from the Department of Social Protection to the housing authorities. The group is currently developing proposals to advance this transfer.

I ask my colleague from the Department of the Environment, Community and Local Government, Mr. Michael Layde, to continue the presentation.

Mr. Michael Layde

I thank the Chairman and committee members. I welcome this opportunity to update the committee on progress in recent months concerning the rental accommodation scheme. The core objectives of the RAS are to reform the approach towards providing accommodation within the private rented sector for long-term dependants under the supplementary welfare allowance scheme and to contribute to the attainment of better value for money for the State in the provision of long-term accommodation options. Funding for the scheme is provided by a transfer of moneys from the Vote of the Department of Social Protection to that of our Department. Moneys are provided on an Exchequer neutral basis to meet the cost of persons transferring from the SWA scheme to the rental accommodation scheme, the total budget for which in the current year is €125 million.

When the rental accommodation scheme was set up in 2004, the expectation was that over a period of years the numbers transferring from rent supplement would be sufficient to ensure recipients with a long-term need would be moved to the rental accommodation scheme or avail of other social housing options. This would, in turn, allow the rent supplement scheme to return to its original objective, namely, providing a short-term income support payment. At the time it was expected that around 5,000 households per annum would transfer from short-term income support under the rent supplement scheme to long-term social housing support. While the rental accommodation scheme has met that objective, with more than 36,000 households transferring to either to it or social housing following assessment by local authorities, including 4,620 this year alone to the end of September, the number of households in receipt of rent supplement has continued to increase, with close to 97,000 receiving support at the end June. This is mainly due to current economic circumstances and the consequent reduction in the number of households able to afford their own accommodation without some State support. Just over 51,000 of these households have been in receipt of rent supplement for a period greater than 18 months. This means that, in effect, the original 18 month cohort has almost doubled in the period since the rental accommodation scheme commenced. This, however, does not alter the fact that the scheme has met the targets set for it. It was never designed to and simply cannot address the volume of cases resulting from the recession. We can push the scheme as far as possible to maximise the rate of transfer of eligible households.

This year also marked the first significant tranche of RAS contract reviews with landlords since the scheme took off in 2005 - contracts are usually of four or five years duration. While the evidence is only anecdotal at this stage, housing authorities carrying out reviews are indicating that a good majority of landlords are renewing their contracts and remaining with the scheme. This is in spite of the fact that for many of them, this means a reduction in the rent payments received upon review. This translates into better value for money for the Exchequer, one of the core objectives of the rental accommodation scheme. Landlords are leaving the scheme for a variety of reasons, including RAS payments are not sufficient to service the mortgages of some landlords, perhaps owing to recent interest rate rises, in conjunction with downward rent reviews; landlords cannot afford to maintain properties to the standards required by the scheme; and, in a few select areas, landlords believe they can achieve a higher rent payment in the private rented market than under the scheme.

My Department continues to treat the rental accommodation scheme as a priority. With the leasing initiative, it will remain a central component of the housing programme into the future. The fiscal and economic climate in which we are operating is difficult; nonetheless, continued steady transfer rates are being achieved. We shall continue to make every effort to ensure we can maintain current levels of commitment and that the work put into making the scheme work smoothly in local authorities is continued and enhanced. I trust the presentation is of assistance to the committee and my colleagues and I will be pleased to answer questions.

Deputy Aengus Ó Snodaigh

I have a number of questions. The officials probably cannot answer my first question, but I will raise the issue nonetheless.

I have asked various Ministers for Social Protection and the Environment, Community and Local Government, in particular the current Labour Party Minister for Social Protection, whether it is correct for the State to continuously underwrite private landlords. Have there been discussions between the Department of Social Protection and the Departments of the Environment, Community and Local Government and Finance on an alternative to the rental accommodation scheme and the rent supplement scheme, especially given the large portfolio of properties held by NAMA? In recent weeks the agency was available to deal with the crisis at Priory Hall. However, there is an ongoing housing crisis. Does Mr. Layde agree it would be more cost effective if the State set aside the pot of money for the rental accommodation scheme and rent supplement to acquire properties from NAMA and make them available as social housing units through local authorities or housing associations? This would be cost effective and generate a greater return in a short period. The State would have an asset and rent would be paid to local authorities and housing associations.

Is it correct that despite the average rate of transfer from the rent supplement scheme being 5,000 claimants, that number would need to double to reach the original target? The number seeking support under the scheme is increasing significantly.

I refer to another problem I have had with the rental accommodation scheme for a number of years. The scheme has had a good effect in that it has set a standard, but there is a still huge problem with substandard properties used to claim rent supplement, which should never have been allowed onto the market. Are all lettings registered with the Private Residential Tenancies Board? Are the properties used under the scheme evaluated, given that tenants seek payments while landlords benefit from the public purse? I have come across damp bedsits and other flats in which the doors and windows do not work.

Many of the clients who want to avail of the recent supplement scheme cannot come up with the deposit and often apply to the community welfare officer for it. There is a delay in processing rent supplement applications, which causes problems between tenants and landlords, but a problem is also emerging whereby CWOs are not providing the full deposit, as they did in the past. The criterion is that an applicant should only receive the full deposit once, but, in some cases, CWOs are offering a substantially reduced amount. This is adding to the crisis some claimants face because they cannot raise the money for the deposit under either scheme.

Mr. Michael Layde

With regard to using accommodation held by NAMA, one needs to distinguish between rent supplement as it was conceived and what its objective was and what in a de facto sense it has grown into and why we are now attempting to address it in the way we are. Rent supplement was conceived as a short-term income support rather than as a payment to meet a long-term social housing need. In that context, the logic was that people would be supported to remain in their existing accommodation, for example, in circumstances where they lost their jobs. One hopes in a normally functioning economy that will be for a short period and they will return to work while remaining in their own home throughout. That was the intention behind rent supplement as conceived.

Through the combination of circumstances to which we referred in our statements, we are in a situation where more households - approximately 100,000 - are in receipt of rent supplement than originally envisaged. It was also originally envisaged that, beyond a benchmark period of 18 months, those with a long-term social housing need would avail of local authority provided housing support as standard or local authority determined social housing. We have been working towards this. We have met the target originally set, but the difficulty has been the growth in the numbers of unemployed, the number in receipt of rent supplement and the number of households we need to accommodate. That is a challenge to be met in terms of social housing provision, which is the other side of the coin.

In terms of households transferring, a variety of solutions is being pursued. Certain people move into traditional social housing, but our capacity to provide such housing in the current economic climate constrains what we can do and we are looking at other options. We are developing the capacity to lease properties, including NAMA properties. Our Ministers have engaged with the agency. We are expecting a significant bonus to local authorities when they can access NAMA properties both this and next year. More widely the social housing initiative is contributing in a significant way to social housing provision. We are also exploring alternatives such as build-to-lease schemes involving the approved housing sector and so forth with the view to generating permanent social housing support. In general, leasing arrangements do allow the option for the tenant to buy.

It is a question of what we can get from the resources available to us. On the capital side, in the current economic circumstances we are severely constrained with the amount of social housing that can be constructed. We can get far more units using current expenditure in any given year with an option to purchase down the line. That is the approach taken by the Government.

Ms Helen Faughnan

Accommodation made available for rent supplement should at least meet the minimum standard required. A legislative change was introduced in the Social Welfare and Pensions Act 2007 to allow the Department to decide not to pay a rent supplement where the housing authority or other agency has notified it that the particular accommodation is not compliant with standards. If we receive a notification to that effect, the community welfare officer will discuss the situation with the tenant and take whatever action is necessary in the tenant's best interest.

Generally, rent supplement claims in respect of properties that have been notified as being below standard would not be paid. This condition was purposefully introduced to improve the standards of accommodation available and support local authorities in their responsibilities in ensuring proper housing standards.

There has been no change in the policy for providing rent deposits. For example, in 2010 approximately €4.5 million was spent on providing deposits to over 8,000 individuals. It is based on need and is individually decided by departmental staff engaging with tenants seeking it.

The Landlord and Tenant Act requires the majority of landlords to be registered with the Private Residential Tenancies Board. There are certain exceptions in that regard.

Deputy Tom Fleming

In April 2011 those qualifying for the rental accommodation scheme, RAS, were taken off the housing lists by various local authorities. This should be rescinded. Many of those affected have been on the lists for seven or more years. They should not be deprived of the opportunity of getting say, a vacant council house.

The criteria of a minimum of 18 months on rent supplement before being considered for the scheme should be reduced. There is a glut of housing with many people having vacant properties on their hands. People should be allowed to enter the rental allowance scheme at a much earlier time.

Local authority housing staff numbers must be beefed up to cope with the extra demands. I know it can be difficult with the current embargo on recruitment but it needs to be considered.

Mr. Michael Layde

Legal provision has been made that a person's housing need is met in circumstances where he or she transfers to the rental accommodation scheme. The Department has communicated with local authorities on how this should be interpreted and applied in scheme allocation. The Department and the Ministers responsible are anxious to see people with identified long-term needs for social housing support having the opportunity of moving within the social housing system to different types of accommodation, appropriate to their circumstances at a given time.

The 18-month threshold was devised by the then Government which faced an identified need for a short-term income support for people temporarily unemployed, for example, versus the need to identify those whose circumstances were unlikely to change and had a long-term need for social housing support. While this can be revisited, one has to be mindful and practical that we are finding it difficult to meet the 18-month threshold as it stands. Reducing it would not necessarily be of benefit unless we could match demand with supply.

In a recent housing policy statement the Government has stated it is looking at the relationship between rent supplement and local authority social housing provision. Ministers have indicated they will contemplate significant changes to better ensure identified social housing need is met in a comprehensive way.

There has been a significant reduction in public service numbers which is still ongoing. Local authorities have had their total staff complement reduced by 7,000 over the past two years. This has had an impact on services. The Department is working with housing authorities to ensure this impact is minimised and resources are deployed to best effect.

Mr. Eddie Lewis

Under the 2009 Act, being a RAS tenant confers considerable benefits, primarily security of tenure because the responsibility for finding alternative accommodation at the end of a tenure lies with the local authority. Other benefits include differential rent supply and employment blocks in rent supplement are removed, better access to choice-based lettings and the incremental purchase scheme. Subject to the allocation schemes in individual local authorities, the right to stay in a RAS property and not move to social housing which some tenants prefer also exists. This removes a tenant having to refuse social housing accommodation and all its consequences.

Notwithstanding these benefits, it was recognised from the beginning that a number of households had a legitimate expectation that they would move to traditional social housing. For this reason, the Department recommended in its guidance that the households concerned would be moved to transfer lists within local authorities under the 2009 Act. Accordingly, they will be treated as they would have been if they stayed on the original waiting list. There were some difficulties in applying this in individual authorities but we have engaged with them to resolve this.

Deputy John Lyons

I come from an area in Dublin — Ballymun and Finglas — which has a large social housing need. From what the officials have just said, it sounds as if there is a grasp on the difficulties in the social housing rental sector and everything is going well. As a Deputy who has to deal with housing issues every day, the reality on the ground is very different.

RAS may have reached its target but maybe that target was too low. A significant number of landlords will not go near the scheme because they get more money through the rent supplement scheme. Then there is the problem with rent limits in some areas and how landlords ask for more from their rent supplement tenants. The majority of tenants I know have a dual contract, the first being the rent supplement given by the community welfare officer and the other in which they pay €300 more on top of the rent supplement to the landlord.

I do not want the officials to reply by asking me to give these tenants' names or ask them to go to their community welfare officers because they will not risk losing the place they call home. We need better solutions to the issues I have raised than what I have got at a previous committee meeting from other officials.

As a member of a Government party, I am disappointed we are not looking at other ways to house people. It is an absolute crying shame that half a billion euro is paid out on rent supplement every year, essentially money just going down the drain. If any member here had to live on rent supplement, we would have a different approach quickly. Those on rent supplement are usually on lone-parent allowances or similar welfare payments as well. Paying an extra €300 a month on their rent takes away half of their other monthly social welfare payments. It is simply unacceptable. It is up to the Department to clamp down on this.

Ms Helen Faughnan

We realise that in some areas there is a problem in this regard. The legislation on rent supplement ensures State support for rents is kept under review, reflects the current market conditions and does not distort the market. This is the purpose behind rent limits in different areas. They were reviewed in the middle of 2010 and the Department is currently undertaking another review which will report at the end of 2011. Generally, landlords tend to adhere to rent limits which puts some control on the system.

Deputy John Lyons

That is not happening. That is what the Department is being told but the people I am dealing with will not tell that to a departmental official. With all due respect, the Department has to wake up to this. Instead, it is ignoring this problem and I feel it will still be the case when this meeting has concluded.

It is grand to set rent limits. Officials have told me that because the Department is such a large provider of landlord funding through rent supplement that it can set rent limits. However, the reality is that rents are set higher than these limits. Those affected in having to pay out more inform us about this but we are powerless to deal with it. I am most certainly not going to go a community welfare officer to complain about a landlord charging €300 more than the set limit and run the risk of the tenant being evicted. A more creative solution than just setting limits is needed.

As I see other members nodding in agreement, I hope they will speak up about this problem.

Chairman

We all hear this problem in our constituency clinics.

Deputy John Lyons

We have to wake up to this. It is not satisfactory to say we are setting limits.

Chairman

Deputy Lyons has made his point.

Ms Helen Faughnan

We will take that under consideration. In some cases though, it depends on the accommodation that is being provided. Is the person over-accommodated? If the person is on social welfare, how are they meeting the extra charge? It must be putting a huge burden on them.

We set limits and ensure landlords operate within them. We are, however, a little hamstrung. If tenants in such circumstances as described by the Deputy inform the Department through the community welfare officer, we can engage with them. If they do not, we are then hamstrung in how we can solve the problem. The landlord, in turn, is getting away with it because the pressure ends up on the tenant.

Deputy John Lyons

If Ms Faughnan found herself in such circumstances, would she go to the community welfare officer and run the risk of losing her home? I do not think so. It is insulting for her to suggest people should do that.

Chairman

This is a pressing issue of which all Deputies and Senators are aware. I am sure some officials are too but they cannot put it on the record. A solution needs to be found. Will the officials come back to the committee with some proposals such as a six-month amnesty? If a person makes a complaint about such practices, the reality is they will be put out of their accommodation by the landlord. I know the solution would be to have all social housing tenants in RAS but that will not happen overnight.

Ms Helen Faughnan

RAS is the solution because the local authority will negotiate with the landlord on behalf of the tenant.

Mr. Michael Layde

Ministers accept there are fundamental structural issues as to how rent supplement operates. It is operating in a manner that was not originally intended. I sympathise with colleagues in the Department of Social Protection attempting to police a system that involves 100,000 households.

An interdepartmental group is devising an alternative system that would bring those households with an ongoing need for social housing support into RAS. It would involve a local authority governance system where the tenant's relationship would be dealt with by the local authority. It would also lead to a significant reduction in the number of households on rent supplement which would make its policing by the Department much easier. While there is no easy solution to this, the solution is in RAS.

Deputy John Lyons

Does that mean a large number of additional private landlords would have to be recruited for this scheme to operate? Many landlords simply do not want to go over to RAS. Many of my constituents on rent supplement have asked their landlords about going over but they said they do not want to. Will we be here next year repeating this argument? I understand that nobody here has a magic wand and I do not expect the delegates to pull out one to sort out this matter. While some landlords are transferring to the RAS scheme a significant number do not want to do so and we will still pay rent allowance and provide dual contracts. There is no silver bullet. We are reliant on good ethical landlords - which let it be said is not always the case - transferring to the RAS scheme but they are not doing so in the numbers we want. We will be faced with the huge problem of €500 million and in a country falling to its knees we should be crying out for something to be done about this.

Mr. Michael Layde

The issue is to incentivise it. The State cannot compel landlords to participate in any scheme but what we can do and what we are trying to do is ensure that the interests of the tenants are served by moving into social housing in terms of re-engaging with the workforce, differential rent and standards of accommodation. The State is and will be a significant player in the rental market and we need to devise a system of incentives and sanctions which make it attractive for increasing numbers of landlords to move to social housing provision through structured arrangements with local authorities while at the same time a small number will continue to provide accommodation for a much reduced number of people on rent supplement. As the Deputy acknowledged, this is not easy and we are trying to craft a solution which is fair and equitable, works within the law and respects property rights.

Chairman

We will return to this issue and make recommendations.

Deputy Anthony Lawlor

This meeting is like a local authority meeting and this is no compliment to the delegates.

I was never in favour of the RAS. Prices in the property market are very low and this is why landlords do not want to enter it. It involves a five year tenancy agreement and there is potential that prices in the property market will increase prior to this. Why should they fix a price now? Instead of having such long-term agreements reviews should be done on an annual or biannual basis which may attract more landlords to the RAS.

Are the delegates considering an alternative to the RAS or are they pinning all their hopes on it? Some of the contracts with landlords very much favour them as they state the property must be returned to them in the condition it was at the beginning of the tenancy. However, the fee being paid is not of long-term benefit to them.

I am fascinated by the idea of using NAMA properties. NAMA properties are not always in the right location. People have come to my office to tell me they want to be housed in their own location. There are many NAMA properties in Leitrim. Do we send all of the people from Ballymun to Leitrim?

Deputy Aengus Ó Snodaigh

There are many in Dublin also.

Deputy Anthony Lawlor

In many instances they are not in the right location. They are in Longford, Leitrim and Offaly.

Deputy Aengus Ó Snodaigh

There are housing lists in Leitrim and Longford also.

Deputy Anthony Lawlor

Do we relocate people? This might not be an alternative solution.

Landlords must have BER certificates for their properties but this does not seem to be applicable to local authorities. Many tenants have complained to me that they are in houses for the long term, perhaps for ten, 15 or 20 years, and are paying rent but the cost of heating the houses is exceptional and local authorities do not have to produce BER certificates. Is it possible for local authorities to be forced to comply with the legislation?

Deputy Ray Butler

A multi-agency steering group has been established to finalise proposals and operational protocols for the transfer of responsibility from the Department of Social Protection to the local housing authorities for persons with long-term housing requirements. I welcome this to a point because when we deal with people we send them to a social welfare officer to get their papers stamped after which they must go to the local authority.

Has the steering group brought out a standard code of conduct for local authorities? I agree with Deputy Fleming that at present local authorities are in turmoil when it comes to housing. There is no standard code of conduct for local authorities. My parliamentary assistant used to work for a Dublin-based Deputy and explained to me that people on a Dublin housing waiting list receive a number to show where they are on that housing list. However, with the local authority in my area it is pot luck and one would need Mystic Meg to find out where one is on the housing waiting list. I would like to see the steering group establish a code of conduct for all local authorities.

Local authorities do not have the manpower required and I have told the Minister I fear that when responsibility for this is transferred to them they will down tools and we will not be able to get through to them on the telephone. At present, the local authority in my area is dealing with a housing allocation backlog dating to 2006. Since I was elected to the Dáil I had one or two people in that local authority outlining their job description because I looked for things I got when I was a county councillor. I can assure the committee that they did not give me a job description another time. However, will we go down that road? Many Deputies make representations with regard to housing. We will get just job descriptions from local authority staff when all of this is under the one roof? I am very fearful because many local authorities are in turmoil at present.

Mr. Michael Layde

My colleague Mr. Lewis will answer these questions but I will make some brief comments.

To be clear, the interdepartmental group referred to by Deputy Butler is examining the structural issues of how rent supplement has become a part of social housing provision, which was not intended, and how we can change to a system that is more rational and better meets the needs of customers.

We acknowledge pressures exist in local authorities. They are a consequence of the climate in which the public service is operating at present. We assure committee members the new arrangements on which the group is working will be devised to be fit for purpose and we certainly will not place impositions on local authorities which they are not capable of delivering. A key part of this will be to create a system that works better. This means ensuring local authorities with diminished resources have the capacity to deal with the new arrangements when they are finalised.

Mr. Eddie Lewis

To return to Deputy Lawlor's point, there are obstacles to landlords transferring to the RAS. Contract length is probably not a major issue because landlords have a range of contracts into which they can enter, including a tenancy by tenancy contract used by many landlords which does not bind them to five year tenancy agreements. The range of agreements also includes twenty-year contracts, so many different types are available. Under the RAS scheme the landlord has responsibility for repairs and maintenance. It is a normal landlord-tenant relationship so if damage is done to the property the deposit can be used to cover it.

The question on BER certificates is broader. They apply to local authorities but to new tenancies. Someone who has been in an existing tenancy for a period would not automatically receive a new BER certificate under the current rules. We are working with local authorities to improve the situation through house condition surveys and general examination of the existing stock with a view to obtaining the information Deputy Lawlor requested on the energy efficiency of various buildings. In one of the schemes we operate with local authorities we give funding, mainly at times of vacancies, to improve the energy ratings of local authority houses. We are very conscious of the importance of improving the energy rating of the local authority stock and are working to that end.

Deputy Anthony Lawlor

What about those in tenancies?

Mr. Eddie Lewis

A house condition survey will be conducted of all houses. The local housing authorities and ourselves are working towards carrying out surveys. They do not require a BER certificate because they are not changing the tenancy.

Deputy Anthony Lawlor

The point I am making is that Mr. Lewis has indicated funding is available to upgrade when there are vacancies. Why is it not available during a tenancy?

Mr. Eddie Lewis

In many cases, it is used for that purpose, with the agreement of tenants. They are not precluded from using it, but it is usually done when there are vacancies because, obviously, it is much easier to do these things when a property is not occupied. It can be difficult to do with a tenant in place, but if everyone is willing, it can be done. There is, however, a limited amount of money available for it.

Vice Chairman

I will call Deputy Seán Crowe, Senator John Kelly and Deputy Michael Conaghan.

Deputy Seán Crowe

It would have been helpful to the discussion if we had heard the figures for the maximum a landlord receives under the rental accommodation scheme and in rent supplement. It is clear the disparity is one of the difficulties landlords have. Perhaps the delegates might give the committee information on this. There is also a difficulty with the roll-out of the rental accommodation scheme in different local authority areas. One local authority will have one scheme, while another will have a different one. I can give an example. Under the Dublin City Council scheme, if a tenant goes to the council and has the landlord on board to participate in the rental accommodation scheme, it usually goes ahead. In my local authority, however, South Dublin County Council, it is based on the first 50 on the list. There is a difficulty in that regard.

There is also a difficulty with two bedroom properties under the rent allowance scheme. A person came to my advice centre with a problem. The landlord had agreed and she wanted to move to the rental accommodation scheme but the local authority would not agree, even though there was a shortage of two bedroom properties in the system. The difficulty she had was that she was separated and often the child was not in the house. When the child was not in the house, she did not receive the same amount in rent supplement; therefore, it was causing major problems.

There was a reference to people not complaining and the extra supplement payable to the landlord. People who come to my advice centres tell me they are afraid to complain about the condition of accommodation because they do not have an alternative. They might be put out of the house if they complain about the condition and the tenancy. There are also difficulties with where the rental accommodation scheme operates. Some local authorities face a situation where there is a percentage figure for rented accommodation in an area; for example, in Tallaght, the decision has been taken that it is 15% or more. This does not happen in other local authorities. In Springfield, where I live, there has been a huge change in the last ten years and many of the houses the council has under the rent allowance scheme are in this area. There are 54 countries represented in the local school; therefore, there has been a huge change. The CSO and the council have figures in that regard. There is a preponderance of rented accommodation in the area.

The rent supplement is also part of this discussion. There is a difficulty with regard to disruptive tenants. The community welfare officer cannot keep data, yet to be included, one must be part of the local authority list. This issue must be examined.

The Minister must examine the disparity between the rent supplement scheme and the rental accommodation scheme. A question was asked about the next step after the rental accommodation scheme. Is it the long-term supplement? I do not understand why we are not discussing that issue this morning. How much was spent on rent supplement last year? We do not have those figures. There are many interpretations of the scheme, which adds to the confusion about it.

Senator John Kelly

I have an issue with the fact that those who are looking for rent allowance must be included in the housing lists. We are always talking about the numbers on the housing lists, but they are not reflective of the numbers who are actually seeking social housing. They are included in order to obtain rent allowance. RAS provides short-term support. In my experience, prior to the introduction of the rental accommodation scheme, one could be in receipt of rent allowance for 20 years, even though it is still referred to as a short-term support payment.

I have a suggestion which should be taken into consideration. There is a great deal of red tape involved in seeking rent allowance. One must be on the council housing list and, as a result, one must have a housing need assessment carried out. However, to have this done, one must be in the landlord's house and three or four months after the assessment is carried out there is no guarantee the council will state one has a housing need. There are all these problems, even for the landlord. A landlord might rent a house to a guy for four months and not get paid. Given that it is a short-term support payment, my suggestion is that rent allowance be granted for the first six months and that the person concerned should not be required to be on the housing list. However, if he or she is going to go on the housing list for more than six months, he or she at least would have six months to have his or her housing need assessment carried out. That would give time to both the tenant and the landlord. The landlord would not get stung and the tenant would have time to have his or her housing need assessment carried out. This is something that should be seriously considered.

There appears to be a disparity throughout the country in the way rents are paid. In Dublin the HSE which was responsible for it had no difficulty in paying rent allowance to landlords, but in the country the superintendent welfare officer will tell the client that he or she cannot and do not wish to do so. The rent limits in rural areas are so low it is making some landlords struggle. There is a rent cap of €70 for a single person for appropriate accommodation, when the only appropriate accommodation in a rural area is probably a three bedroomed house. On the basis of that €70 rent, the tenant receives €54 or €56 and, in most cases, is not paying the remaining €24 or €26 to the landlord. Landlords are just happy to get the rest. Deputy John Lyons said the opposite was happening in Dublin. There is no point saying one can deal with this issue on an individual basis. It is virtually accepted in rural areas that the landlords are just happy to receive the rent allowance because they know the tenant will not pay the rest. It should be uniform practice throughout the country to pay rent allowance to landlords to ensure, at least, they will not be struggling to receive it. There are some struggling landlords in rural areas. They bought properties at the peak of the market and the rents they receive, I believe, would not cover 33% of their repayments. We are in danger of landing many of them in trouble also. What do the delegates think about my six month idea and not putting people through a housing need assessment initially?

Deputy Michael Conaghan

I had intended to raise a number of the issues raised by Deputy Lyons. As he raised them very effectively, I will not repeat them. Deputy Lawlor mentioned how he evaluates RAS houses but I evaluate them on the basis of talking to people in the RAS houses, who mention that they have an opportunity for the first time to create a home for their family. Generally, people are satisfied with that and we should judge it from that angle rather than an angle that is too ideological so that it does not meet our criteria of the terms under which these houses are rented to people. It provides a good outlet for many families.

I ask for witnesses to respond to the following scenario, which is the what the person on the street knows. There is a huge number of people on the housing list, who are waiting and waiting. Samuel Beckett would probably write a play about it if he was around the city council offices. There is a lot of misery, with young families in a box bedroom with three children, various medical conditions and very moving personal difficulties. There is an endless queue that would fill Croke Park and the match would be over before they got in. On the other hand, there is a huge stock of vacant, purpose-built accommodation. People ask whether we can bring together these two items. What are the difficulties and challenges and what is the potential of bringing these two pressing matters into alignment? How do witnesses see this as part of the solution, particularly in a city where there is purpose-built, high-quality accommodation owned by the State and lying vacant? If we see this as part of the solution, we should draw ourselves towards it rather than walking away. We should draw ourselves towards the broader scenario. City and county councils may be in a position to do the processing work to help bring about the alignment.

Ms Helen Faughnan

Deputy Seán Crowe referred to the spend on RAS. As I mentioned in my opening statement, €516 million was spent on the RAS in 2010. Regarding disruptive tenants, the recourse for the landlord in the first instance is the Private Residential Tenancies Board, PRTB, and the Garda Síochána. If it is brought to the attention of the Department by the landlord and the landlord wants to terminate the tenancy, we terminate rent supplement. There is that element of using the stick.

Deputy Crowe also raised the issue of a two-bedroom house and the case of separation. We are seeing more and more of this. When the rent supplement claim is being assessed, where there are sharing arrangements in respect of the child, the community welfare officer will use his or her discretion in terms of the accommodation needs of the family. We are aware of instances where provision is made for a second bedroom if that is the nature of the separation or divorce arrangements for the children.

Senator Kelly referred to the six-month plan. The problem with rent supplement, which is why the change was made to the 2007 Act, is that one arm of the State - the Department of Social Protection - was looking after a cohort of people who now number almost 100,000 customers and the local authorities considered them to be looked after. There was no recourse to local authorities. We thought it was important that if another arm of the State was providing income support, people needed to be assessed in respect of their housing need so that they were on the books of the local authorities and that their local authorities were aware of their housing needs.

Rent supplement was supposed to be a short-term income support measure whereby someone was in a position to pay rent and then something happened, either illness or unemployment, and the State stepped in to try to help in that short-term period. However, that is not what has happened and the effect has increased with the recession.

I have a concern that if we are providing rent supplement for the first six months with no indication of the housing needs of the person, the numbers will increase. We will bear in mind this point as a suggestion. I ask my colleague to comment on Deputy Crowe's question about maximum limits on rent supplement and RAS.

Mr. Kieran O’Dwyer

Deputy Crowe asked about the rent supplement limits in different parts of the country. The limits depend on household composition and the part of the country in which the person lives. For example, in Dublin city the maximum rent limit for a three-bedroom house for a couple with three children is €1,100. In Galway, the same house is €760. The limit for a single person in Dublin is €529 and in Galway is €468. The limit depends on household size and where the household is situated. The limits we set are based on our analysis of the market in each area. We consider public information and rent levels and we consider information from the PRTB. There is also input from the Department of the Environment, Community and Local Government when setting limits. The last thing we want to do is to set a limit that distorts the market and makes rent supplement the leader in the market, which would have an impact on low income families that do not receive benefit from the State. If we were to increase limits, it could have an impact on low-income families and we do not want to do that.

Deputy Seán Crowe

I know the maximum amount in Dublin city is €1,100 and that the limit under the RAS is €700.

Mr. Kieran O’Dwyer

A discount applies to landlords under the RAS, amounting to approximately 8%, on the basis that there is no guarantee a person in receipt of rent supplement will be in the tenancy next week. Under the local authority scheme, where the landlord enters into a contract for five years, the RAS applies a discount of 8% on the basis that the landlord will have full occupancy of the accommodation unit and will suffer no loss as a result of the tenant moving out. That is the rationale for the difference between the two.

Deputy Seán Crowe

Is the difference 8%? There is a great disparity between what landlords are getting under one of the schemes.

Mr. Eddie Lewis

The two schemes are aligned on the basis that both rely on market rents. The difference is that under RAS the local authority will negotiate that and the benchmark given is to obtain an 8% reduction, representing the fact that the vacancy risk has been taken on by the State. It is equivalent to one month's rent in a year, which is what a private landlord might expect to lose. Since that is no longer a risk to the landlord, the State should get a reduction. In particular cases, there may be local authorities saying the market rents are lower than other figures that have not caught up with it yet. Both schemes are based on market prices.

Deputy Seán Crowe

The argument locally is that there is a major disparity between what landlords get under rent supplement and the local authority scheme and the RAS.

Mr. Eddie Lewis

They should not be a major disparity. It is clear that in Dublin City Council, some landlords think there is now very little risk associated with rent supplement and question why they should lose 8% and they are going back to rent supplement. We have that explanation for why people are not continuing with RAS and presumably not coming into the RAS. It is of the order of 8% to 10%.

Mr. Helen Faughan

I apologise to Deputy Kelly, I had not answered his-----

Senator John Kelly

I thank Ms Faughan for calling me Deputy but I am a Senator.

Mr. Helen Faughan

In regard to rent supplement being paid to landlords, the current legislation already provides for the payment of rent supplement to another person, a relative, a landlord or a landlord's representative on behalf of the recipient at the tenant's request and it is subject to the consent of the Department. Approximately 20% of our current supplement payments are paid to a person other than the tenant but under the legislative provision, the Department's relationship is with the tenant and to remove the right of the tenant to receive this payment by making it payable only to the landlord would require a legislative amendment and there are no plans at present to do this.

Under the current arrangements, even with the direct payment up to which the tenant signs, the landlord must still collect the tenant's contribution which is a minimum of €104 per month. That can change. If the person was in part-time employment, he or she would have to pay an additional contribution. It comes down to the efficiency of the system and that could be significantly affected if this arrangement was changed because, potentially, the Department would have to have formal relationships with approximately 96,000 additional clients, that is, the landlords. This would involve greater complexity and significant resources to deal with a new set of third parties. In particular, it could also result in the Department being drawn into disputes between landlords and tenants.

Where the Department becomes aware that a person receiving the rent supplement is not using it for the purpose for which it was intended, that is, to pay the landlord, that matter is investigated and the supplement could be stopped.

Senator John Kelly

That does not solve the landlord's problem. That only makes the situation worse. All that happens is the person leaves that house, goes somewhere else and starts all over again. If the rent allowance is payable to 20% of landlords and if other tenants request that, it should be allowed. Surely, we cannot set a precedent for 20% and not apply it to the rest.

Many superintendents, even on the request of tenants, do not allow it purely because of this nonsense that we have somehow formed a contract with the landlord if we pay him or her the rent. That is the only excuse. I am sure something could be drawn up that would cover the Department in that there would be no contract, that the money would be paid at the request of the tenant and that the contract would be between the tenant and the landlord.

In regard to a moratorium of six months before somebody gets on to the housing list to get rent allowance, is that the call of the Minister of State with responsibility for housing or the Minister for Social Protection? Is it the Minister of State with responsibility for housing who says that in order to qualify for rent allowance, one must be on the housing list and that one does not have to go on it for three months or six months until such time the housing needs assessment is done?

Mr. Helen Faughan

The Social Welfare and Pensions Act 2007 brought that in.

Senator John Kelly

Could the Department consider that? It is very important as it is taking three or four months for the local authorities to do the housing needs assessment and neither the landlord nor the tenant knows their fate.

Mr. Kieran O’Dwyer

I would like to clarify something for the Senator. The 2007 Act provides that in order to get rent supplement, a person can satisfy one of two criteria. One of the criteria is that he or she has a housing needs assessment carried out by the local authority. However, there is another way to access rent supplement, that is, where somebody has been renting property and where somebody would have been in private rented accommodation and perhaps lost his or her job or suffered a significant reduction in his or her income level and requires assistance from the State.

In such a situation, the person does not have to have a housing needs assessment carried out prior to getting rent supplement if he or she has been renting for six months or more in the previous 12 months. In that situation, a person goes down to the community welfare officer and explains his or her situation and change in circumstances. In those cases, rent supplement becomes payable immediately, subject to other conditions of the scheme being satisfied.

The community welfare officer can then refer the person to the local authority to have his or her housing needs assessment but it does not impact on getting rent supplement from day one. The idea being that we recognise that this person has a short-term need. Where he or she has that short-term need, we want to meet it immediately and not have him or her wait. If it looks like the person will have a longer-term need, he or she will then be referred to the local authority for the housing needs assessment to be carried out.

Senator John Kelly

I know everything Mr. O'Dwyer has told me because I was community welfare officer for 28 years. He is preaching to somebody who knows the situation but that is why I am coming up with two proposals which are slightly outside what he told me.

Mr. Michael Layde

On Deputy Conaghan's point on matching supply and demand, vacant properties and so on, that is a source of real concern to us in circumstances where approximately 100,000 households have been identified as having a housing need that needs to be addressed, although notwithstanding the fact that approximately half of that cohort are on rent supplement. We are actively engaged in trying to source supply. There are constraints. Essentially, local authorities and approved housing bodies can purchase property but there have been difficulties in getting property owners to accept what is the true market value. Obviously, we can only pay what is a reasonable market value. There have been constraints. Hopefully, as the property market settles and more realism comes into play in terms of what property is worth, we will make some further progress.

Similarly in regard to leasing, which is another supply source, we have been working with local authorities to improve the capacity to deliver larger numbers of units, many of which are vacant, through leasing. Again, that is a work in progress and it is about engagement with property owners, whether people who own one or two properties or people who own property on a larger scale, to get them to see the benefits of the leasing arrangement. Again, we must get value for money for the State so leasing must be based on prevailing market rates for rent with a discount because of the risk being transferred to local authorities. It is about getting people to be realistic in terms of what can be offered.

Our Ministers have been engaging directly with NAMA over the past number of months at chairman and chief executive officer level. Loans were transferred to NAMA, as opposed to property. Obviously, the basis of those loans was property. NAMA has been going through a process with developers in regard to how those loans are to be serviced into the future. In circumstances where they cannot reach agreement, the appointment of a receiver arises. As members will be aware, that process has intensified in more recent times. Greater amounts of property are now coming under the direct or indirect control of NAMA. Ministers met NAMA again recently and we are confident that there will be a significant social dividend in terms of property transfer from NAMA.

However, there is an issue of suitability, that is, that the properties are of a suitable standard and are in appropriate locations. We would not be in the business of acquiring large housing estates in particular locations but rather good quality property suitable to the needs of people with a social housing need. We are working actively on that at the moment.

Deputy Barry Cowen

I thank the officials for giving us an update on the schemes. I welcome the concept of the transfer of the rent supplement scheme from the Department to the local authorities. The establishment of a multi-agency steering group to do that puzzles me. Of whom does it consist? When is it likely to be done? I would have thought it was a straightforward enough operation.

Having said that, I know the officials are constrained by virtue of the schemes and that they can only work with what is put in front of them. To a certain extent, much of this relates to political decisions which must be taken. Other members agreed with the difficulties expressed, in particular by Deputy Lyons and others. For example, 50% of the representations I receive are in regard to housing. Having been a council member for many years, I understand the frustrations of members in their efforts to try to deliver on those representations. However, one must remember that the backdrop to this is that there are literally no capital programmes for local authorities any more. It appears that the voluntary housing associations have no capital programmes. Is it the case that they can now provide their own funding? The rent supplement and rental accommodation schemes were supposed to be short-term measures, but they are now long-term measures. The entire housing sector is in crisis. Solutions drawn up a number of years ago are having to deal with a situation today that was not imagined at the time.

The time has come for an audit and review of existing schemes, templates, means and methods by which housing is provided for those who require it urgently. It should be conducted by representatives of local authorities; officials from the relevant Departments, including the Departments of Social Protection and the Environment, Community and Local Government which have specific responsibility for housing; those involved in voluntary housing agencies; representatives of the private rental sector; councillors; officials from NAMA; and members of the committee. It is high time major emphasis was placed on this area, as we need to find a means of resolving this crisis. We should propose workable solutions to address the problems. I accept that the officials are hamstrung in the sense that proposing such solutions is not their responsibility. They can only do what they are told and what they are directed to do. I recognise that all they can do is work to the best of their ability under the existing schemes and systems in place. With due respect to those who are engaging with the local authorities and the various Departments to manage and implement these schemes, I do not believe the current approach is working.

Half of the representations I receive as a public representative relate to housing. I know the majority cannot be sorted in the short term. I do not know what solution is in place to address this issue in the long term. The stopgap solutions that were supposed to be in place for a short time are now considered long-term. That is not going to work. The joint committee should contact the two relevant Departments to look for a group to be put in place to address this issue immediately. The group should be responsible for coming up with long-term solutions. These short-term proposals were introduced at a time when capital programmes were being implemented at local authority level. There was some sense in them then, but that is no longer the case. They are now the only show in town.

We have a massive unforeseen housing crisis. A new cohort of people are arriving on the steps of local authorities who never envisaged they would be in this predicament. I do not like to engage in scaremongering or to frighten people, but this is a crisis. All of the members present have said 50% of the representations they receive relate to housing. In current circumstances, to be honest, we have very little chance of dealing with the majority of these applications. The officials have referred to the negotiations with NAMA, but it is time for the social dividend to be yielded. I respect what they have said about the appointment of receivers, but I remind them that receivers have only one thing in mind when they are appointed. They want to get the best bang for their buck and more luck to them. They have no obligation to us. The obligation to us is on the part of the officials or the Ministers who act on our behalf in negotiations with NAMA. We have been around long enough to realise that there are these housing provision needs. We should know where they have been identifed, what they are and how they might be met. We need to focus on those areas in which the crisis is particularly acute. A working group needs to be put in place as soon as possible to address this issue.

Deputy Nicky McFadden

I thank the officials for their presentation. It is frustrating that they keep referring to rent supplement as a short-term payment. That is not the case in my experience. I agree with Deputy Cowen in the sense that 50% of those who come to my clinics are concerned about housing. It is the chicken and the egg. Some €516 million was spent on rent supplement in 2010. I consider this to be a massive waste of money. It is more attractive for landlords to avail of rent supplement because they do not need to have houses of a standard that would be acceptable to a local authority. The uptake of the rental accommodation scheme is very low in my area - a figure of 8% has been mentioned - because landlords are not availing of the facility, even though it is of five years duration. The joint committee will have to address this issue seriously. I ask the Chairman to take account of Deputy Cowen's point that we need to come back to this matter and deal with it in the future. Many local authority houses could be built for €516 million.

Vice Chairman

We may have to suspend the sitting for a few minutes because a vote has been called in the Dáil Chamber. It has been suggested to me that at our next meeting we discuss in private session the possibility of a delegation approaching the Ministers for the Environment, Community and Local Government and Social Protection. Is it agreed to discuss that suggestion at the next meeting of the joint committee? It is a good suggestion. Perhaps we will suspend the sitting now to allow members to vote in the Chamber.

Deputy Brendan Ryan

Do we have enough time to get an answer to a question?

Vice Chairman

Okay.

Deputy Brendan Ryan

This is probably one for the officials from the Department of the Environment, Community and Local Government. As they will be aware, not everyone on the local authority housing list is in receipt of rent supplement. As a result of recent legislative changes, an offer of an arrangement under the rental accommodation scheme is considered to be appropriate for certain persons. I mention this to set the context for the difficulty I am raising. I often deal with people who are seeking what is known as a rental accommodation scheme in situ arrangement. The officials will be familiar with such an arrangement. It happens when a tenant’s existing landlord is willing to allow him or her to participate in the rental accommodation scheme. One has to have been in receipt of rent supplement for 18 months before one can enter into a rental accommodation scheme arrangement. That rule is being applied in my local authority area. I will use the example of a tenant who has been on the housing list for a long time and is considered by his or her local authority to have a housing need. If he or she has been working in a low paid job, he or she will not have been in receipt of rent supplement and will, therefore, be disbarred from entering into a rental accommodation scheme in situ arrangement. When such a person gets to the top of the list, he or she may very well receive an offer of an arrangement under the rental accommodation scheme.

Mr. Eddie Lewis

I will respond to the Deputy briefly. He is correct in what he has said about the rental accommodation scheme but not in what he has said about leasing. Local authorities are able to enter into what some call rental accommodation scheme-type arrangements. In other words, the arrangement is exactly the same as under the rental accommodation scheme, with a landlord in the short term. The only difference is that one does not need to be in receipt of rent supplement. One can use leasing money when one gets to the top of the waiting list. There is no prohibition on somebody receiving it in such circumstances. There is no limit on funding or anything like it. If the person can find a house, the local authority will come to us and he or she will receive the money.

Deputy Brendan Ryan

It is not the case that such a person has to be in receipt of rent supplement for 18 months in order to transfer.

Mr. Eddie Lewis

Absolutely not. If he or she comes up through his or her allocation scheme to the top of his or her waiting list, and he or she is given a private-----

Deputy Brendan Ryan

I am not talking about getting to the top of the list. I am talking about a person who might be one year away from an offer, whereas somebody in receipt of rent supplement-----

Mr. Eddie Lewis

The position is that it has to be in accordance with that person's allocation scheme. Perhaps that is where he or she might be caught. If it comes as part of his or her allocation scheme, there is no problem. If it comes as part of the rental accommodation scheme, there is no problem. Some cases may be in between, as the Deputy suggested. Such persons would on a waiting list in the normal course of events.

Deputy Brendan Ryan

I know, but that does not solve the problem. If somebody is in receipt of rent supplement-----

Mr. Eddie Lewis

If he or she is in receipt of rent supplement, it will be done through the rental accommodation scheme.

Deputy Brendan Ryan

A person in the same circumstances who is in receipt of rent supplement can enter into a rental accommodation scheme in situ arrangement.

Mr. Eddie Lewis

Yes.

Deputy Brendan Ryan

A person who is working cannot enter into such an arrangement, however, even though he or she is also on the housing list.

Mr. Eddie Lewis

That is not possible until the person comes through the allocation scheme.

Deputy Brendan Ryan

Yes, but the person is on the housing list.

Mr. Eddie Lewis

While that is true, the reason for this is that the money under the rental accommodation scheme comes by way of rent supplement.

Vice Chairman

I am conscious of time pressures. I ask the delegation to wait until Deputies return from the Dáil before giving further answers. We will suspend the sitting briefly to accommodate Deputies' participation in the division.

Sitting suspended at 11.10 a.m. and resumed at 11.35 a.m.

Chairman

There are a couple of questions from Deputies McFadden and Cowen remaining to be answered.

Mr. Michael Layde

Deputy Cowen raised, rightly, fundamental issues about how we respond to the scale of the housing need identified, with 100,000 people on waiting lists and a total of 250,000 households being supported by the State in one way or another through the provision of rent supplement or social housing. The Ministers are absolutely alive to these issues. The housing policy statement issued by the Minister of State, Deputy Penrose, in June touches on many of the points raised by Deputy Cowen, including the need to develop a holistic response to how this housing need can be better met. One important aspect of this is dealing with the provision of rent supplement and social housing. The group to which the Deputy referred is an interdepartmental one involving ourselves, colleagues from the Departments of Social Protection and Public Expenditure and Reform and, crucially, the local authorities which must be part of the process which is complex. There are technical ICT and organisational issues, as alluded to by some members of the committee, in terms of the provision of local authority resources and so on. It is a work in progress and the Minister will be bringing proposals to the Government before long.

Other issues the Deputy mentioned were also touched on in the housing policy statement of last June, for example, the increased involvement of approved housing bodies which now have the capacity to borrow from the Housing Finance Agency. This allows us to look at new arrangements such as build-to-lease, which is a way of providing permanent social housing without utilising the much reduced public capital programme. This option is being exploited by a small number of the larger approved housing bodies.

I have spoken about the engagement with NAMA and how important it is as a potential source of supply. The statement reinforces the fact that for the foreseeable future in the light of the overall economic position we will not be in a position to engage in the type of capital investment in housing seen in the past and that, therefore, we must consider an alternative suite of solutions. This work is under way. The various issues being addressed were flagged in the policy statement, including the one we have been discussing.

Deputy McFadden made a point about the rental supplement scheme not being short term in practice. That is the reality. It was intended to be a short-term scheme in providing income support. The idea was that those participating in the scheme with a continuing need would make the transition to more standard or formalised social housing accommodation. That is what we are aiming to do, but we are challenged by the fact that the numbers have increased significantly, including those in the 18 month plus cohort. There is approximately a 50:50 distribution within the total number. This presents a significant challenge, but we are working to find solutions.

Deputy Brendan Ryan

The discussion on the matters with which I was dealing was brought to a premature end prior to the suspension. Let us suppose two people join the council housing list on the same day, one of whom is in receipt of rent supplement and the other is not but is on a low wage. During the following month or two the person in receipt of rent supplement in private rental accommodation can avail of the rental accommodation scheme, unlike the person in a low income job. This seems to be totally unfair. One possible outcome is that the person on a low income who is struggling to make ends meet might well decide that the only way forward for her is to avail of social protection. This is not a good result for someone who wishes to make something of his or her life having been through a period of difficulty and who wants to continue to work, but sees no way out of it. Will the delegation comment on this?

Mr. Eddie Lewis

Let us hypothesise further. There could be three people and the third person could be someone on the waiting list. Who should be given preference on the waiting list? Should it be the person who can avail of the rental accommodation scheme and, therefore, jump up the waiting list relative to another on the list? The reality is that there are 40,000 households waiting for social housing.

Deputy Brendan Ryan

I am not referring to jumping up the list. The comparable person can avail of the rental accommodation scheme in situ.

Mr. Eddie Lewis

The rent supplement scheme is based on the fact that it is revenue neutral. We receive money from the Department of Social Protection because the State is already paying for the person concerned. Let us consider the case of someone who is not in receipt of State support. There are 40,000 on the waiting list with a housing need. This is the same as suggesting we could deal with 40,000 people in the private rental sector. We have used waiting lists for many years to control supply because we do not have the money to do otherwise.

Deputy Brendan Ryan

What if this tips someone towards availing of social protection?

Mr. Eddie Lewis

That is probably one of the factors giving rise to the increase. We accept this and understand the anomalies.

Deputy Brendan Ryan

From a social policy point of view-----

Mr. Eddie Lewis

However, the immediate consequence of allowing 40,000 people to access the level of support suggested by the Deputy would be the State and the Exchequer incurring vast costs that could not be borne.

Mr. Michael Layde

As my colleague suggested, this illustrates the broader structural issues we must address and that we are addressing in considering how to meet total needs in the most cost-efficient way because cost is a factor. However, we must do so equitably. It must be done in a way that is transparent and shows fairness. This is difficult to achieve. However, it is part of the process set out in the policy statement of last June. We set out our ambitions for rent supplement and the rental accommodation scheme and for those who fall outside both of these but who have an identified housing need. We are working to try to find solutions to this problem and to eliminate anomalies.

Deputy Brendan Ryan

Will the delegation factor in the point I have raised to their considerations?

Mr. Michael Layde

Yes, absolutely.

Chairman

The delegation has stated there are 40,000 households on the waiting list.

Mr. Eddie Lewis

That figure is for those not in receipt of rent supplement. In fact, the figure is closer to 50,000.

Chairman

The impression was given that there might not be enough private properties available to the rental accommodation scheme. This does not correspond, however, with the information available from the delegation. Are there difficulties in seeking property?

Mr. Eddie Lewis

There are always difficulties. One examines properties and perhaps the standards are not high enough. There is a range of issues involved.

Chairman

I accept there might be a difficulty with certain individuals, but, overall, are there enough properties available?

Mr. Eddie Lewis

There is no funding restriction. If more households move come across, the scheme is revenue neutral to the State. We are happy to take across as many as the system can bring. In some cases, there are tenants who have no wish to come across, sometimes for surprising reasons. We are unsure why, but perhaps people like a particular landlord and are not prepared to move to another property, even if it means transferring to the rental accommodation scheme. There is a variety of factors and reasons it cannot be increased by much more than is the case.

Chairman

One factor to which the delegation has adverted is supply on the private landlords' side. Is that the case?

Mr. Michael Layde

Supply is a factor in two senses. People can move across in one of two ways. They can move across while in situ in their current accommodation or as a consequence of the local authority finding appropriate accommodation for them. In the case of the former, it is voluntary from the point of view of the landlord. Members of the committee raised issues in this regard and I suggested that, as part of the reform we are attempting to engineer, we would try to ensure there were as many incentives as possible for landlords but there remains a reluctance, some of which might be due to the discount we require or perhaps an unrealistic view of what the rental market might generate in the immediate future. There is uncertainty surrounding the value of property, while rental values are also a factor. As things stabilise, we hope the attractiveness of what we have to offer will encourage more landlords to engage.

On the supply side, the local authorities face the same issues in generating a supply to meet the needs of persons moving across from rent supplement as they do in generating a supply for those on waiting lists generally. We have discussed the various constraints in place and the need to progress on the issue of leasing and engagement with NAMA and so on.

Mr. Eddie Lewis

It is worth noting that in some cases landlords do not like the idea that there is an availability agreement such that they would have to accept a nominated tenant they did not know. Some resist this. That is why we have allowed for persons to move across on a tenant only or existing tenant basis.

Chairman

Are there premises being offered with no one in situ?

Mr. Eddie Lewis

Subject to a premises being suitable, there is not a long list of landlords offering. Local authorities advertise regularly for landlords. They always receive a response but not as much as they would like.

Chairman

Is there a genuine shortage?

Mr. Eddie Lewis

There are two sources of supply - existing landlords and vacant properties. Local authorities try to secure that supply.

Chairman

If someone is in situ and refuses to move, which is acceptable, can they move to a different scheme?

Mr. Eddie Lewis

Not from the rent supplement scheme, no.

Mr. Michael Layde

A person receives two offers and there are two refusals.

Ms Helen Faughnan

We want to incentivise our rent supplement customers to move. We have made legislative changes in recent years. There is a difference in the contribution the rent supplement tenant has to pay to the landlord. Over a number of budgets it has increased from €8 to €24 for a single person which is on a par with differential rent. We need to examine the situation for families. There is a disparity which could act as a disincentive for somebody who wants to move to the differential rent scheme, despite the other advantages to him or her in moving to the rental accommodation scheme.

Deputy Brendan Ryan

I ask the delegates to clarify the position on two offers and two refusals. If there are two refusals, it suggests a persons has received three offers.

Mr. Eddie Lewis

No, there are two refusals. After the second, one might lose one's benefit.

Deputy Brendan Ryan

After the second refusal.

Mr. Eddie Lewis

Yes.

Chairman

Deputy Cowen's questions were answered when he was not present.

Deputy Barry Cowen

I will read the Official Report.

Chairman

I thank the delegates for their presence and answering most of the questions posed. If we have any follow-up questions, we will contact them. We will consider the issues involved and make recommendations.

The joint committee adjourned at 11.50 a.m. until 9.30 a.m. on Wednesday, 9 November 2011.