Before we enter on Committee Stage of this Bill, I should indicate to the House that amendment No. 3, in the name of Senator Reynolds, is out of order on the ground that it involves a potential charge on the public revenue.
Housing (Miscellaneous Provisions) Bill, 1979: Committee and Report Stages.
An Leas-Chathaoirleach
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
Could the Minister give us some information on this section? It provides, as I read it, for the devolution to local authorities of the administration of certain housing grants, presumably new grants or improvement grants. I understand that in the past certain experiments were carried out by way of giving to selected local authorities power to look after the inspection and payment of grants. Could the Minister give us an indication of how they worked in the past and what his intentions are for the future? I would be particularly interested in hearing from the Minister how much autonomy he proposes to allow local authorities in the event of these powers being devolved to them. I would not like to see a situation where powers are devolved and every action by the local authority has to be referred back to the Custom House for validation or for approval. If there is to be devolution I would like the Minister to assure us that it will be real devolution. In that connection, how can he give real devolution when he now controls the financial division of local authorities totally since the abolition of rates and the introduction of the new regime whereby their budget is fixed in the Custom House by a flat percentage increase irrespective of the needs of the local authority?
There was devolution towards certain local authorities on an experimental basis. This worked very well but it was necessary to make a change due to the centralisation of grants. For example, when the £1,000 new house grant came into operation it was more feasible to operate this from one centre in the Department rather than through various local authorities. The very same applied in respect of house improvement grants. It was far more feasible to operate the £600 house improvement grant than to devolve the system to certain local authorities. Prior to the coming into operation of the £600 house improvement grant we had the £200 housing reconstruction grant which was payable by the Department and a supplementary £200 housing reconstruction grant which was payable by local authorities. There was no question of local authorities not having the finance to carry out schemes should it be found necessary to devolve any further work on to the local authorities. The housing authorities would do the inspections themselves, receive applications and they would be recouped the full cost by the Department. They would work within a framework of regulations which would be made under this Act.
Can I take it that the Minister says that at the moment no local authorities are administering housing grants, either new or improvement?
Except in respect of essential repair grants, disabled person grants, invalided grants. In that area they are operating schemes.
The normal housing grants or improvement grants are not being administered by the local authority. Is it the Minister's intention in the future to devolve this power to the local authority?
Not at the moment.
I regret that there is less than an enthusiastic acceptance of devolution by the Minister and by the Department. It was a very welcome initiation, which was established about four or five years ago. It had certainly great advantages which, in my opinion, far outweigh the advantages the Minister has only been able to enunciate since the £1,000 grant was introduced two years ago, since when it has been necessary to centralise the matter in the Department. The advantages that I saw from this devolved system of administration was that it cut out an awful lot of duplication and overlapping of work that went on, both in the actual compilation of planning schemes, in the inspection of those planning schemes and their finalisation. Such advantages far outweigh any administrative advantage that might have arisen as a result of the introduction of the £1,000 grant. I would regret that there should be any departure from this precedent which was established four or five years ago, as regards devolved schemes being given to local authorities. They are highly capable both of administering and finalising any local authority housing schemes, they have the staff and certainly if they do the work it will cut out a lot of duplication and overlapping that went on before this devolution was introduced four or five years ago.
In the initial stages of schemes, such as the £1,000 new house grant, it is necessary to have them centralised due to the fact that it is important to have consistency as regards decisions. That is one of the principal reasons. For administrative purposes, it can be carried out in a more efficient manner at a centralised position.
Do those reasons mean that there will never be devolution?
No, I said in the initial stages and when there is experience of the scheme having been operated for a number of years, then consideration will be given to devolution.
Essentially is it not the position that the housing grants for new houses and for improvement grants have been payable for a great number of years? The level of grant or the details of the regulations may change from time to time, but the principle has been in operation for a great number of years. It would seem to me that if there are administrative difficulties in the way of devolving these payments or if there is need to try to get consistency in the application of standards, these problems should have been solved by now. The Minister should be able to know at this stage if devolution is feasible or not.
This is one case where we are allowing administrative problems to take precedence over what is the basic operation of the Department of the Environment and the local authorities, namely the provision of housing for our people. There have been considerable delays in the past in regard to the finalising of housing schemes due to the overlapping which has gone on. For the sake of the administration of this £1,000 grant and other grants for houses we are allowing ourselves to forget the most important basic aspect which is the provision of houses at the quickest possible rate.
Not all local authorities are famous regarding the rate of completion of housing schemes. Reverting to what the position was before 1973 will make the provision of houses by local authorities—and the Department who ultimately hold the key to the whole situation—slower than it has been over the past four or five years. This is the fault I find with this centralisation that is going on again, that local authorities will be slower in providing the houses that are needed due to over-lapping and inspection. I do not think the Minister should allow just the administration of the grant aspect of the provision of local authority houses, or any housing, to take precedence over what is the major aspect of the situation—namely the actual completion of the houses.
Prior to the introduction of the £1,000 new house grant there was a means test in operation in respect of all other grants. The local authority were the most appropriate body to carry out that means test because they had the staff who were in a position to assess means and to submit actual reports on applications to the Department. This has all changed as there is no means test for the £1,000 new house grant nor is there a means test for the house improvements grant. Neither is there a means test for the new grant of £600 for the conversion from oil heating to solid fuel heating. Local authorities are quite free to build single rural houses and to build local authority schemes up to a certain number without consultation with the Department of the Environment.
I welcome this section because one of the most unsatisfactory aspects of the administration of housing grants in the recent history of this country has been the fact that the administration has been cock-eyed. There has been a system under which somebody building a house subject to grants by the local authority or by the Department has had in the first instance to apply to the Department of the Environment and then to his local county council for payment of the first part of the grant. There are too many anomalies in this. It simply means that one in the first instance writes to the Department, gets an application form, completes it and returns it. One subsequently applies to the county council and when part of the house has been built one notifies the Department. In turn, the Department inspector looks at the extent to which the house has been completed and decides whether the Department can pay the grant. Subsequent to that the Department are in the business of notifying the county council that the first half of the grant has been paid, at which stage the county council are empowered to pay their part of the grant. Then the circus continues when the house is completed because at that stage the applicant applies again to the Department. There is a further inspection by the Department inspector to consider the question of the payment of the grant. If this is in order and, subsequent to the Department paying the grant, the county council are in turn notified that it has been paid. Then the county council are in the business of paying their part. There is duplication and triplication of administrative effort. It is one particular area in respect of which we are interested in getting some kind of proper decentralisation.
Without going into the business of decentralising separate Departments of State, already within each of these county councils there is a great deal of administrative work that be can be carried out at a local level much more efficiently than under the present structure. If this section is necessary legally to allow that to happen, I welcome it and I would urge the Minister to arrange practically a total delegation of administration of housing grants to the county councils.
Question put and agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
Subsection (4) states that:
This section shall be deemed to have come into operation on the 1st day of January, 1979.
Is this to validate grants that have been paid already?
Yes. This provision is intended to validate the payment of a grant approved by the Minister for Finance in August 1978 of £6,000 or two-thirds of the cost, whichever is the lesser amount, for administrative and general expenses of the National Association of Building Co-operatives in 1979.
This is a very welcome provision which gives the Minister power to make grants available but I should like to know if it is proposed to confine the provision of grants to the National Association of Building Co-operatives or can the Minister include any other voluntary co-operatives who may look for grants? Secondly, apart from the £6,000 odd grant the Minister has mentioned, have any other grants for 1979 been indicated to other bodies?
No. This relates solely to the National Association of Building Co-operatives.
Will the Minister have power under section 3 to make grants available to other bodies since the idea of encouraging voluntary groups to cooperate in building houses is a very desirable one?
Yes, we can do so.
Can the Minister give any indication of the terms or conditions that are envisaged in subsection (3) for the payment of such grants?
It is necessary for the co-operative groups to keep accounts and to submit quarterly accounts to the Department.
That is all the Minister reckons they will have to do to qualify for a grant?
Yes.
Everybody welcomed this section on Second Stage. It gives encouragement to co-operative and voluntary associations but I should have thought that the Minister would have spelled out a little more his own sentiment that he would like to see much more active involvement by such voluntary groups in this sphere of house-building. Is the level of grants to remain as it has been? Is the Minister satisfied that the amount of moneys which have been given are adequate to encourage such bodies to be more active in future? Should we not consider increasing the grants available? What was the amount of grants given in 1978? This Bill gives the Minister an opportunity to spell out exactly what he has in mind as regards further encouragement for these associations.
The National Association of Building Co-operatives are the umbrella organisation for other co-operatives. A grant of £6,000 or two-thirds of the cost, whichever is the lesser, was paid to the central organisation for administrative and general expenses. There are other sections in this Bill which provide specifically for grants for co-operatives. I am very keen on the promotion of co-operatives and my Department will continue to do everything possible to assist co-operatives.
On the last occasion I raised with the Minister a question in relation to section 3 which deals with grants for expenses of certain bodies. A rural housing organisation in County Clare and in certain western counties was promoted by Father Harry Bohan. The object of that organisation was to promote the co-operative building of houses in rural towns and villages. It has been very successful in that task. Will that rural housing organisation qualify for assistance under this section?
Since the Bill was published we have not received any application for a grant from the RHO in County Clare. Any such application will be considered and we will deal with it on its merits.
In view of the importance of co-operative housing socially, would the Minister take an early opportunity to get a significant measure of publicity for this proposal?
I certainly will.
Arising from the Minister's reply, can he indicate that there is no reason to anticipate that the RHO would not qualify?
We would have to consider the application when we receive it. It must be a co-operative in the strict sense of the word, but we will do everything possible to assist it.
Pursuant to the Minister's reply about the £6,000 which was paid to the umbrella authority, as it were, the voluntary associations, the Minister said other sections of this Bill provide financial assistance for the co-operatives and voluntary associations. Perhaps I should know what those sections are, and what financial assistance is given to individual associations and co-operatives. Perhaps the Minister would spell out exactly what it is. A £6,000 grant to the umbrella group appears to be inadequate for any expansion of the services we might want that umbrella group to undertake in future.
One of the great defects in local authority housing has been the length of time it takes local authorities to get schemes completed and finalised. In future we will have to look for a greater effort by voluntary and co-operative associations to provide the greater number of houses that will be required. Greater financial assistance than hitherto should be given to the individual associations and co-operatives for the work they are engaged in to encourage them to do more and to get new associations formed which could do this most important work. Perhaps the Minister would spell out briefly what assistance is given under this Bill to individual associations, other than the umbrella group, and whether it is his intention to expand these financial assistance measures.
Sections 4 and 5 cover grants to co-operatives as well as to individuals. The real power is in sections 12 and 45 of the 1966 Housing Act, where provision is made for an element of subsidy to co-operatives for building and also for the provision of sites. Between 1972 and 1978, very little was done to improve the position of the co-operative movement as regards the building of houses. I am glad we are now taking positive steps to assist co-operatives and to provide as much assistance as possible for them. As I indicated already, I will be making a further statement on the matter shortly.
Sections 4 and 5 do not include any extra benefits for either co-operative or voluntary associations. They do not include any extra financial assistance for individuals who apply for grants for house improvement works. The Minister mentioned the incentives that exist in the Housing Act of 1966. We should have better incentives in future for co-operatives and voluntary associations. I accept that the Minister will be making a statement shortly, perhaps to announce further incentives to these groups.
The definition of "person" under the Housing Acts covers a co-operative. That is covered also under sections 4 and 5.
I am prompted to remind the Minister of the effective system in operation in the UK in this regard. They talk about the third arm. We have two arms of building here, private building and local authority building. In the UK there is a very strong third arm. I hope there will be a lot of consultation with experts like Father Paul Byrne who worked in this area in the UK, are now back home and are available to give advice.
I appreciate the point made by Senator Mulcahy. The whole housing financial structure is different in the UK from the structure here. They have not got the problem of a rising population such as we have.
They have managed to come up with another way of handling the housing problem, the third arm approach, and there is something to be learned from that.
In the UK private enterprise is very weak as regards housing. Housing authorities must come up with about 50 per cent of the housing stock. I know what the Senator's feelings are on the matter, and I will look into it and see what can be done.
What I am afraid of is that in the future, with a tightening of money, we will be squeezed for money. Any system that will encourage the financing of housing should be adopted.
Question put and agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."
Section 4 (2) (e)—and this is one of the conditions precedent to a grant—reads:
...a requirement that the person to whom the grant is paid or the spouse of such person, either separately or with each other, has not previously purchased or built for his or their own occupation another house,
This is the small print that was obscured by the magic figure of £1,000. It was a new provision that a person had to be buying a house for the first time. Many people who applied for the £1,000 grant found themselves ruled out because of this small print which is now embodied in paragraph (e). I can see reasons for it but I wonder, as drafted, will it be unduly restrictive. I have in mind a situation where a widow remarries and her second husband applies for a grant to buy a house. It is ascertained that her first husband had purchased a house and, because of the present trend towards putting houses into joint names, technically she would have been a purchaser with her first husband. If so, the second marriage would be ruled out from obtaining a grant by this paragraph.
I will say exactly what the Minister said in the Dáil. We would take a sympathetic view of cases such as that mentioned by Senator Cooney.
Can the Minister tell me under what provision he would be entitled to take a sympathetic view? This is a statutory provision. As I read it, he cannot go beyond it, or outside it, or the Auditor General will be after him.
I propose to deal with this matter on Report Stage. I will have more information for the Senator as to how we propose to deal with such a case.
I should like paragraphs (a) and (f) defined. Under section 4 (1) (a) the Minister can make regulations in regard to the amount of a grant. There is no doubt that the level of the grant proportionate to the cost of building a new house has suffered a serious reduction from the value it held compared with the cost of building a house ten or 15 years ago. I believe there is a case for indexing in regard to grants vis-á-vis the cost of houses. In the past year, for instance, the cost of new houses has increased by 25 to 30 per cent. While the £1,000 grant seemed of considerable assistance in 1977, now, only two years later, it does not represent the same favourable proportion of the cost of providing a new house. The Minister should consider introducing an indexing system whereby grants would be increased to cover the real cost of houses, as the prices of houses go up from year to year.
In regard to subsection (2) (f), the Minister has indicated that he has not considered introducing a means test in regard to the allocation of grants for new houses. It seems that under paragraph (f) he is taking the authority to introduce such a means test and to introduce requirements in regard to the financial circumstances of any further applicant. I do not know if that paragraph should be in this Bill. I see no reason for it at present. Unless there is an ulterior motive behind its insertion in this section of the Bill, I would prefer if it were not there at all. It will only introduce an element of suspicion on the part of any new house builders that their means can be taken into account in assessing the £1,000 grant.
In accordance with section 4 of the Bill the Minister may make regulations covering a number of matters relating to the payment of new house grants. These regulations can cover quite a number of items, including the matter mentioned by Senator Cooney, and can also cover a means test if it is considered necessary under any future scheme. For instance, there could be a number of changes in the grant structure and it may be necessary to bring in a means test. Provision can be made for the test without legislation. Section 4 is an enabling section and changes will be made by regulation.
If section 4 relates to the payment of the £1,000 new house grant, can the Minister clarify the position of the houses owned or occupied by tenants of SFADCo? These houses are a unique development. They were built by SFADCo. The present group of tenants were given the impression during the course of the last general election that they would qualify for the £1,000 grant if they were to buy out these houses. They decided to pursue that incentive and they found that when they sought to purchase the houses they were refused the grant. It is a unique situation and I would welcome an assurance from the Minister that these people will be granted that facility.
This section covers new house grants only. I know the unique position in Shannon, as explained by Senator Howard. This position can be examined.
Houses are being continuously built by SFADCo. People who have been offered tenancies wish to acquire these houses but have found that they have not qualified for the grant.
The decision in relation to the payment of grants in this case would be for the the Minister for Industry, Commerce and Energy. I will take the matter up with him and have it examined.
Could the Minister give me an assurance that he will report on the decision?
I shall let the Senator know.
The Minister should have power to control certain developments. I am referring to the practice of people who, having obtained various aids towards the purchase or the erection of their home, dispose of it to another person who converts it into flats, or in the case of original owners, the people who acquired the house in the first instance, converting it into flats. Has the Minister power to recall the grant or will he accept that this is a development over which he should have control?
An Leas-Chathaoirleach
I am loath to interrupt the Senator, but surely that point would arise more appropriately under section 5. Section 4 deals with new houses.
Section 4 (2) (d) deals with the occupation of the house.
It would be a matter initially for the planning authority to decide whether permission should be granted to allow the house to be developed into two units.
That would be the ideal way but it does not happen that way. Earlier, we spoke of circumvention and I am aware that there has been circumvention. I feel that it would be desirable for the Minister to have this power. Am I to take it from the Minister's reply that this is a matter solely for the planning authority?
My Department look for a certificate of planning approval or a certificate of exemption from planning permission before a grant is paid. The point is adequately covered that way.
I am impressed by the Minister's promises to consider sympathetically under this section the point made by Senator Cooney with regard to, say, a widow who remarries and her spouse proposes to buy a house, and also the point made by Senator Howard in regard to the Shannon scheme. If I understand Senator Howard's description of the Shannon scheme correctly, I think I have some experience of a similar situation in which a builder built a house and leased it to a tenant for a period of 12 months, following which the tenant entered into a purchase agreement to buy the house and was refused the £1,000 new house grant because the house was not regarded as new to him as a purchaser. I would like to know how the Minister proposes to deal with these things sympathetically. He is bound under this section in relation to the points made by Senator Cooney and Senator Howard regarding tenant-occupied houses and tenants purchasing the houses.
In relation to Shannon, the Minister for Industry, Commerce and Energy must be advised and consulted before any grants are paid. My Department do not pay the grants; they are paid by the Department of Industry, Commerce and Energy.
I am not familiar with the Shannon scheme but let us take the case of a builder who builds a house and lets it to a tenant for six months. If at the end of that time the tenant buys the house from the landlord, is that tenant entitled to the £1,000 new house grant?
No. The £1,000 new house grant is payable to first-time occupiers.
How can the tenants in Shannon hope to get the £1,000 new house grant if they have been occupying the houses as tenants?
One could say that the people in Shannon could be covered by the occupation clause but it can vary. As I said previously, this is a matter initially for the Minister for Industry, Commerce and Energy, who must be consulted.
That seems to be a red herring. Let us leave the Shannon scheme out of it altogether and talk about any circumstance in which a tenant of a new house buys out the property. I know of one case where a person got a tenancy in a new house from the builder because he was not able to arrange his mortgage finance for some months. He put £1,000 into a building society for six months, at the end of which period he was able to get his loan sanctioned, but when he went to buy the house from the builder he was denied the £1,000 new house grant. It occurred to me when Senator Howard was on his feet that this was the type of problem being created in Shannon. I do not see what the Department of Industry, Commerce and Energy have to do with it if under this legislation they are just not entitled to the £1,000 new house grant. I do not quite understand what the paragraph dealing with occupation means and perhaps the Minister could enlighten me.
The position is that the £1,000 new house grant is payable to first-time owner occupiers. Regulations may be changed at any time.
I would have thought that the problem here was that the house was not new to the purchaser, he had been a tenant and he was now buying the house but it was not new to him. In relation to the client that I mentioned, the problem with the Department of the Environment was that the house was not new to him as a purchaser. I cannot see how this problem will be overcome by the occupation paragraph. The Minister suggests that under paragraph (d) it will be possible for the tenants of houses in Shannon or elsewhere, if they buy out the houses, to avail of the £1,000 new house grant. Will those houses be new at that stage if that was the problem in relation to the other example I gave?
It may or may not be possible. The grant could be paid to a builder under subsection (2) (d), the occupation clause. As I said initially to Senator Howard, I am not familiar with the scheme in Shannon. I intend to take it up with the Minister for Industry, Commerce and Energy who is very much involved in it and I will let the Senator know as soon as I have matters finalised.
This section is fairly restrictive. I suspect the Minister feels he has powers that he does not have. I can imagine quite a number of cases where people should in all justice be able to avail of the new house grant, but under this section they will not be entitled to it by law, regardless of how sympathetically the Minister may wish to consider their case.
I am trying to put in a nutshell the situation in Shannon. SFADCo are continually constructing houses in Shannon and making these houses available for people who are working in the area and getting married. A newly married couple will be offered the tenancy of a house, but they will not qualify for the £1,000 grant if they decide to purchase the house.
They are not new houses.
This is the situation I want clarified.
Senator Molony has missed the point completely. Section 4 is anything but restrictive. It enables the Minister to make the regulations to cover numerous items and it is a wide-ranging section.
I assure the Minister that I have not at all missed the point. In relation to the matter raised by Senator Cooney, the Minister said he would deal with it sympathetically. I suggest that the Minister is in no position to deal with it sympathetically because it is not a matter for the Minister. Nowhere under this section is there provision for the situation that Senator Cooney outlines. Nowhere do I see discretion given to the Minister. It is about that I complained. It is good that the Minister should be able to consider unusual cases sympathetically, but my point is that he does not have the power to do it. Perhaps I should not have spoken specifically in relation to the Shannon scheme because I am not familiar with it, but the more I have heard Senator Howard describe the scheme the more it becomes clear to me that the problem is that these are not new houses and therefore do not qualify for the new house grant. Nowhere in any of the paragraphs in that section, even under paragraph (d), the occupation of the house, do I see the Minister having the discretion to deem a house that is two or three years old a new house, simply because it was occupied by the tenant who is now buying it.
I shall come back later in relation to section 4 (2) (e) and the question Senator Cooney raised about widows remarrying. In relation to this special scheme in Shannon, I shall go into the matter fully and contact Senator Howard on the matter.
Question put and agreed to.
SECTION 5.
Question proposed: "That section 5 stand part of the Bill."
I would like to ask the Minister if under this section it is possible for an individual to get a grant for rewiring a house. I recently had a case of a widow with three children who was told by the ESB that her electricity system was faulty, that she would have to have it rewired and that it would cost something in the region of £400 or £500. She applied to the Department for a grant and was told there was no such grant available. She then got in touch with the ESB and she was likewise told they did not have any grants. Given that there are grants for new windows and doors and for house extensions, perhaps the Minister would consider giving grants for rewiring of houses having regard to the safety aspect.
The position is that such a grant can be paid provided it is part of reconstruction work. If a house requires complete rewiring, usually it is necessary to do more to the house than completely rewire it. It has reached the stage where other reconstruction and improvement works are necessary in the house. An application for rewiring can be considered and paid in conjunction with the normal scheme of reconstruction for the house such as new doors, new windows, roof repairs and so on.
I can accept that but in the case I referred to nothing else was required. The house is only 15 to 20 years old and is in fairly good condition. The owners had applied for grants for windows and so on in the past few years and because of that it is not possible now to have a separate grant for the rewiring of the house. In this particular case, and I am sure there are many more cases like lit, rewiring is absolutely essential for the safety of the individual. The person in question is a widow and £400 or £500 is a substantial amount of money to have to pay for electrical repairs.
Surely the powers that the Minister is taking under section 5 to enable him to give grants for improvement of houses would cover the case raised by Senator Harney? Improvement works are defined in the definition section as anything which is reasonably necessary for the purpose of rendering the house more suitable for human habitation. Rewiring would certainly appear to come within that definition and if it does the Minister would be empowered to give grants under section 5 which would cover a case of rewiring.
The position is that for rewiring alone there are no grants at present except if it is involved with some other reconstruction work on the house. It could be covered by regulations under section 5 of the Bill. The position at the moment is that the Government are paying about £30 million a year in respect of reconstruction and improvement works on houses as compared with £5 million a couple of years ago. This is a matter which will be kept very much in mind when the regulations are made.
I request the Minister to include the rewiring of houses in the Department's interpretation of the enabling regulation. There are very few people who are going to contemplate an overall or even partial rewiring of their house unless there is a very good reason for them to do so. After all, they are not contributing anything in that rewiring to the ornamental or decorative appearance of the house. When they feel pressurised to undertake such a task they do it on the grounds of security and safety for their own habitation. The Minister has provided in his existing regulations regarding improvement grants that the expenditure must be in excess of £100 and I think he should include a provision regarding rewiring operations as long as the costs are in excess of £100.
I can see the points raised by the Senators. The position is that we have power to make such grants available under section 5 but again it is a question of finance. We are committed now to huge expenditure in respect of the change from oil to solid fuel burning. We will keep it continuously in mind.
Question put and agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."
There is a point I want to make in regard to section 6 (4) which talks about Gaeltacht grants. I want to ask the Minister would he, as the Minister for the Gaeltacht is unable to do so, give to English-speaking islands the same level of grant as given by the Minister for the Gaeltacht to Gaelic-speaking islands? Because of an historical accident the inhabitants of some islands speak English while those on other islands speak Irish and the present position regarding grants is very unfair.
As far as I know, the decision to give increased grants to English-speaking islands was taken some time ago. An announcement will be made shortly on the matter.
I am very glad to hear that.
Question put and agreed to.
Section 7 agreed to.
SECTION 8.
Question proposed: "That section 8 stand part of the Bill."
I have a query on this section. This is the section that provides for the local authority making a loan and provides for the securing of that loan. Subsection (2) paragraph (d) envisages a situation where the borrower has already mortgaged his interest and it provides for the securing of the local authority loan by an instrument of further charge in repayment of the loan. The earlier subsections distinguish between an instrument vesting the ownership of the house in the housing authority which is commonly called a mortgage. That type of instrument relates to property that comes under the Registry of Deeds because paragraph (b) envisages the charging of a house where the property is registered under the Registration of Title Act, generally rural property. Paragraph (d) deals with a situation where there is a mortgage in existence and provides for a second mortgage. However, where there is a first Land Registry charge it does not seem to me to deal with the question of how a second Land Registry charge is to be secured. It uses the words: "where ownership is already vested in the person" but under the Land Registry regime ownership does not vest in a mortgagee. A mortgagee obtains a charge against the lands and the folio. There is no change of ownership. The ownership is charged. There does not seem to be provision for charging the second mortgage where the title is registered in the Land Registry.
The position is that section 8 (2) is a re-enactment of section 40 of the 1966 Act which has not caused any problems up to now. As regards the second part of the Senator's query about the position in the Land Registry, this point is something new to me and I will take it up on Report Stage.
Subsection (3) enables loans to be made without requiring a mortgage or a charge. Has the Minister any idea as to what the financial limit will be in relation to such loans? What sort of instrument does the Minister envisage will be required to ensure that the local authority can proceed in a court to recover their loan? I know that there is provision in subsection (6) for a local authority to sue by way of simple contract debt for the arrears of a loan but such proceedings will normally refer to the mortgage or the instrument of charge. In this case where no mortgage or instrument of charge is required the proceedings will have to refer to some sort of document or instrument setting out the loan. What has the Minister in mind there?
Section 8 (3) covers unsecured loans up to a limit of £600. Subsection (6) of section 8 provides that:
Any sum due to a housing authority by any person in respect of a loan made under this section may, without prejudice to any other power in that behalf, be recovered by the authority from that person as a simple contract debt in any court of competent jurisdiction.
Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill."
I gather from the provision in section 9 that it is not common at the moment for local authorities to provide subsidised sites. In Thurles the local authority own a fairly substantial tract of land from which they have been selling subsidised sites for some time. Does the Minister intend to encourage this type of development all over the country? It is a very good idea and something to be encouraged.
There seems to be a great absence of rent on all houses which commenced on consultation between the Minister's Department and local authorities in relation to legislation being brought before the Houses of the Oireachtas by the Minister. I refer specifically to a case affected by the Landlord and Tenant Act, 1978, where local authority tenants were given the right to acquire the fee simple in their properties as were private individuals. I predicted at that time that that legislation would cause enormous legal difficulties. My statement at that time is becoming a reality. For example, in relation to about 40 of these subsidised sites in Thurles, there is presently great difficulty over the manner of transfer of the sites from the local authority to the purchasers. Many people have commenced building their houses on these sites and they presently fear that they may not be able to get title for quite a long time yet as a result of which they will suffer a great financial burden because of the exorbitant rates of interest that have to be paid on bridging finance. I made inquiries about this both from the urban and the county council and the reason for this is because there was no consultation between the local authority and the Department before that legislation was passed. It is only now when the local authority solicitors got their hands on the 1978 Landlord and Tenant Act that these problems have come to light.
Enormous dangers are being created for people in relation to the financial burden caused by bridging finance. It also seems that the policy of local authorities will vary from area to area and that the policy of the Department is at odds with the policy of the local authorities. In south Tipperary, in relation to these subsidised sites, where the question of restriction on sale for a number of years has arisen in the past, they have had to abandon that policy because of the Landlord and Tenant Act, 1978. In north Tipperary they are wondering what they can do about it. The local authority do not want people to engage in speculation in relation to subsidised sites, but on the other hand they are faced with the difficulty that building societies will not lend money where there is a restriction of 25 years on the transfer of sites. If the Minister proposes to embark upon the schemes which seem to be suggested by section 9, will he have full consultations beforehand with local authorities so as to avoid the type of mess we have at present?
My Department have been in consultation since 1966 with local authorities regarding matters such as those raised by Senator Molony. My Department consulted with a number of local authorities before the landlord and tenant legislation was drafted in 1978. I hope that as many local authorities as possible will provide as many private subsidised sites as possible to enable persons in need of housing to build on them either on a personal or on a co-operative basis. I know that in some towns there are legal and title problems but this is not covered under section 9. Most of the points raised by Senator Molony are not covered under section 9 of this Bill. There are some financial problems as well but the principal problems relate to title.
I do not follow what the Minister means by title problems. There are title problems of the Government's making because they introduced legislation without sufficient consultations with local authorities. If the Minister is not aware of the difficulties in relation to the Landlord and Tenant (Ground Rent) Act, 1978, I can assure him that both Thurles Urban District Council and the North Tipperary County Council have had to seek senior counsel's opinion and advice on how they can effect transfers in accordance with the law and still protect their interests in the properties. Perhaps that difficulty could have been prevented if there had been some consultations beforehand.
The local authorities had consultations with the Department who had consultations with the Department of Justice before the drafting of the Landlord and Tenant Bill. Ground rent was abolished in respect of all new tenancies created from a certain date and, as far as I know, there is no ground or after a particular date.
The problem does not actually arise in relation to ground rents. I know that was the intention of the Bill, but it had other consequences that were not anticipated at the time. The precise problem being experienced at the moment in Thurles is that there are sites which people are anxious to buy. Some people have entered into contracts to buy them from the local authority. The difficulty is that the local authority are anxious to ensure that there is no property speculation in relation to these subsidised sites. In order to avoid that they need to put a restriction on the sale or transfer of those sites to anybody for a period of 25 years except with the consent of the local authority. That has been the practice. I do not want to get involved because there are many legalities and technical points in this. I know they can no longer, practically speaking, look for that restriction. The problem created is that they will cease to deal in subsidised sites if speculation occurs. I would like to know in relation to section 9 whether the Minister envisages that there should be restrictions on the ability of people to sell these sites after the local authority have subsidised their purchase.
The problems raised by Senator Molony were anticipated when this Bill was drafted following consultations with the local authorities. The local authorities anticipated these problems. This matter is not covered under this Bill, which relates to the provision of sites for private housing. The main points raised by Senator Molony are covered under the Landlord and Tenant Act and are not appropriate to this Bill.
They are not covered. I must be making the point very badly because——
They are referred to in the Landlord and Tenant Act.
The trouble is that they were not referred to. Unless I have completely misread it, the section provides for subsidies by the Minister to housing authorities for provision of sites for private housing. That is exactly what I am talking about. I assume the Minister does not approve of speculation.
That is a leading question.
Assuming the Minister does not approve of speculation in these subsidised sites, I want to know whether he intends that local authorities should have a restriction on the sale or should impose a restriction on the purchase and sale of those sites, for a period of, say, 25 years, which has been the norm in the past.
The answer is "no" so far as speculation is concerned. Why should these people be at a disadvantage in relation to other persons building houses?
How will we avoid speculation? This problem occurred in the sites I am talking about. The local authorities say that as long as they provide subsidised sites there must be a restriction or else there will be speculation. The Minister now says, as indeed the Landlord and Tenant Act does in its own silent way, that there cannot be a restriction of that nature. What is to happen?
I suggest that these people should be at a disadvantage because they are getting subsidies from public moneys.
The categories of persons to whom subsidised sites are made available are not statutorily prescribed but in practice such sites are made available in accordance with the understanding between my Department and the local authorities. The eligibility guidelines are that subsidised sites should be allocated only to tenants or subtenants of local authority dwellings who intend to leave the dwellings, persons on the authority's approved waiting list for rehousing, persons proposing to build houses for their own occupation who, with effect from 27 May 1977, are in the category eligible for local authority house purchase loans, and co-operative housing groups in which a reasonable proportion of the members qualify under paragraph (c) which I have already read out.
Are those people at liberty to sell the site a month after buying it from the local authority?
Yes, under the Ground Rents Act. It is not covered by this Bill.
Section 9 provides for these subsidies. Does the Minister think that is a good idea? The local authority in north Tipperary think it is a very bad idea. Their problem is that they own these sites and feel they have been codded into selling sites worth £4,000 for £1,000. As soon as they transfer one of these sites to any person, under existing legislation that person would be able to sell the site on the open market and gain a profit of 300 per cent or 400 per cent.
It appears that the Senator's local authority is one of the very few who think it is wrong. We received requests from many local authorities to move in the opposite direction.
Am I to understand the Minister to say that he thinks it is right that somebody should get a site worth £4,000 for £1,000 from a local authority and should have the right to sell it the following day on the open market?
The remedy lies in the hands of the local authorities. They can charge the full market value if they like.
What is the point of a subsidised site? The answer, I believe, is to give the local authority the right when they sell a subsidised site to somebody to put a restriction on the purchaser's right to resell that property without the consent of the local authority. This would ensure that, if he sells, at least it will be to somebody who would get a subsidised site from the local authority. It would also ensure that there is no profiteering in relation to this. Have no doubt about it, there is to be profiteering.
The value of a subsidised site to a person depends on the category that person is in. Most local authorities are very careful about whom they allocate subsidised sites to. Broadly speaking, they only allocate subsidised sites to people who require them and who would otherwise be on the housing list.
The Minister is thinking of a perfect world where he thinks that the local authority would be able to so assess people in advance that they would be able to exclude all temptation to speculate from the allottees. The position clearly is that the Minister should take power, or indicate to the Minister for Justice that he should amend the Landlord and Tenant Act to take power, to enable local authorities to do as Senator Molony is suggesting.
Many of the queries raised by the Senators relate to the Landlord and Tenant Act and not to the present Bill.
This problem is very appropriate to this Bill.
On a point of order. Senator Molony is entitled to make any points he wants on this section, but he is not entitled to cross-examine the Minister. My submission is that he now is cross-examining the Minister and not merely making points on the section.
With respect, it is not possible to debate a section on Committee Stage without a certain exchange of information. That normally can only be elicited by a process of question and answer.
In relation to the point of order raised, Senators may speak more than once on a Bill on Committee Stage.
I ask the Minister to reconsider the whole area. It is raw policy and is going to create some very bad situations that will be regretted in the future.
Question put and agreed to.
SECTION 10.
Question proposed: "That section 10 stand part of the Bill."
Why is there a difference between subsections (1) and (2)? What different financial regimes were in existence to cause this distinction?
Subsection (1) deals with the period from 1 April 1973 to 31 December 1976. Subsection (2) deals with the 1977 and post-1977 period.
I want to know what was the position in the 1973 to 1976 period that differs from the 1977 period onwards?
Subsection (1) provides for the subsidy arrangements which applied during the period from 1 April 1973 to 31 December 1976 and together with subsection (7), which provides that the section will be deemed to have come into operation on 1 April 1973, validates the payment of subsidy during that period on the basis of the arrangements then applying. Paragraph (a) provides that:
The Minister may, in respect of the period commencing on the 1st day of April, 1973, and ending on the 31st day of December, 1976, with the consent of the Minister for Finance, pay, out of moneys provided by the Oireachtas, a subsidy of such amount as he may determine towards the expenditure incurred by a housing authority in respect of—
(i) moneys borrowed by the authority for the provision of a house for letting in respect of which a grant under section 15 of the Principal Act has not been paid, and
(ii) the maintenance, management and improvement of such a house.
Section 15 of the Principal Act which is being repealed enables the Minister to pay a grant to a person, including a housing authority, for the provision of a house. Grants were paid under that section in respect of certain houses which were provided for sale by a housing authority. Grants were not paid, however, in respect of houses provided by a housing authority for letting. A subsidy was available in respect of houses under section 44 of the 1966 Act. The expression "the provision by a housing authority of a house in respect of which a grant under section 15 of the Principal Act" is used in this paragraph and in section 44 of the 1966 Act to distinguish between houses provided for sale and houses provided for letting. Whereas section 44 of the 1966 Act enables subsidies to be paid in relation to the annual loan charges incurred by a housing authority in respect of money borrowed for the provision of houses for letting this paragraph would provide a basis for the subsidy arrangements which applied between the 1 April 1973 and 31 December 1976 and which was based on the deficit on a local authority's housing revenue account. These latter arrangements took account not only of the annual loan charges incurred but also the current income and other expenditure in relation to local authority rented houses, that is, rent and maintenance and management costs together with a proportion of the proceeds of sales of local authority houses.
The deficit on local authority housing revenue accounts was being transferred to the Exchequer on a phased basis over the period 1 April 1973 to 31 December 1976. In the financial year 1973-1974 the Exchequer generally recouped 25 per cent of the local authority housing deficit to local authorities, 66½ per cent in 1974, 75 per cent in 1975 and 87½ per cent in 1976. Recoupment of the housing deficit in 1975-76 was, however, subject to limitations on certain categories of expenditure such as maintenance and management expenditure. In 1977 and subsequent years the subsidies payable to housing authorities in relation to houses provided for letting relate to the annual loan charges only. Paragraph (e) provides that "a subsidy under this subsection shall be subject to such conditions if any as the Minister may specify and without prejudice to the generality of the foregoing". The conditions may include conditions relating to rent, purchase of the house concerned, standards of construction, contributions from the housing authority concerned towards the expenditure involved and expenditure on the maintenance, management and improvement of the house concerned. The purpose of this paragraph is to enable conditions to be attached to the payment of subsidies under paragraph (e) in relation to the matters specified. If the subsidies paid during the period from 1 April 1973 to 31 December 1976 had been paid under section 44, conditions in relation to most of the above matters could have been contained in regulations under section 44 (4). The statutory basis for subsidy payments made during that period, however, is provided by section 23 and in order to ensure the validity of the conditions attached to the payment of such subsidy paragraph (e) specifically provides that the subsidy payments shall be subjected to such conditions, if any, as the Minister may specify.
I am clear on that, thank you.
Question put and agreed to.
SECTION 11.
Question proposed: "That section 11 stand part of the Bill".
Could I ask the Minister with regard to subsection (2) paragraph (a) (ii), where it is provided that the local authority having made a loan and sold the house pay a subsidy to the person to whom the loan was made and the house was sold, "in respect of expenditure incurred by him in relation to the transaction to which the loan or sale relates, what does "expenditure" cover there?
That is section 11?
Yes, subsection 2 (a) (ii).
The expenditure is the cost of the house. Subsection (2) would enable a housing authority to pay supplementary subsidy to a borrower or purchaser in addition to the subsidy paid by the Minister under subsection (1). The amount of any such supplementary subsidy, however, may not exceed the amount of the subsidy paid by the Minister. "Expenditure" means the full cost of the house.
A person operating under that subsection could get a loan from the local authority, a subsidy from the Minister and a subsidy from the local authority?
That is so.
What are his chances of getting all three?
It appears that there are around 600 cases a year getting all three.
Would "expenditure" include his legal charges?
No; that is doubtful.
I wish to make a point in regard to the section. It is about the low rise mortgage scheme which has been a very good and welcome addition to the financing of housing. I will not say anything about increasing or asking the Minister to increase the loan amounts or even increasing the income limit because we have already covered that ground on Second Stage. There are just two aspects of existing regulations in regard to the low rise mortgage scheme to which I want to refer. One is the case of a potential tenant of a local authority house. He has to be 12 months on the waiting list. This could well be reduced by the Minister to, say, half that time without unduly affecting the amount of moneys which are available under this low rise mortgage scheme and the number of applicants we would have for its facilities.
The second point is in regard to childless couples. There may well be an anomaly here because, as I see it, the low rise mortgage scheme can apply to existing tenants who themselves may be childless and yet, under the regulations, a potential tenant of a local authority house who is childless is disqualified from seeking the facilities of the low rise mortgage scheme. There is an anomaly here which could be corrected by removing this "childless" restriction completely. Apart from any anomaly there may be in the administrative sense, I think it is socially undesirable that people should be penalised to this extent who are willing to build their own houses and thereby save local authority houses for people less able to find the balance of moneys to provide houses for themselves. I would ask the Minister to consider eliminating this qualification about having one child to qualify for the low rise mortgage scheme since it does not seem to apply to an existing tenant of a house who can get a local authority house even though he has no children.
The position is that under this section the low rise mortgage scheme, which is a fairly popular one, can be changed. I can give no commitment at this moment as to what extent it will be altered. Neither can I give any firm commitment as to when it will be altered. I have great sympathy with the categories mentioned by Senator Markey. As my Minister mentioned in the Dáil, when changes are being made we will treat sympathetically childless couples and those who probably may be entitled to priority on social and professional grounds. I can give no firm commitment as to when this will be done. Definitely, when the changes are being made we will bear the categories mentioned by the Senator very much in mind.
I accept that as long as the Minister accepts that there appears to be an anomaly on the grounds that I indicated in regard to existing tenants and potential tenants. In one case there is a low rise mortgage scheme facility without children and in the other there must be children.
Yes, that will be considered.
Question put and agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."
The interest subsidies for certain types of loans by building societies which are guaranteed by the local authorities raise the question of the need for a general subsidy towards all building society loans, particularly at a time of exceedingly high interest. There are precedents from some years ago, in the time of the Minister's predecessor, when interest subsidies were paid to cushion the impact on young married couples of high interest rates. At present many people are being seriously prejudiced by virtue of the high interest rates which building societies and other lending agencies have to charge. The Minister, in order to try to keep down the inflationary spiral and reduce the pressure on people to seek increases in income to compensate for their increase in repayments, should come in at a very strategic point in the economy and subsidise building society repayments during times of high interest. It would have a great dampening effect on demands on the economy and would help keep the inflationary spiral under control.
The interest subsidies mentioned by Senator Cooney do not come within the ambit of section 12. Such interest subsidies were discontinued in 1976. Since 22 June last the associated banks increased their interest rates from 1½ per cent to 3½ per cent. The lowest rates offered to depositors with up to £5,000 went up from 8½ per cent to 10 per cent. The rate of deposits between £5,000 and £25,000 went up from 9½ per cent to 12 per cent. The rate on deposits over £25,000 went up from 10 per cent to 13½ per cent.
The present investment rate offered by building societies is 9 per cent. Traditionally, building society rates have always been higher than bank rates, at least for amounts up to £5,000. The reason for this has been to enable building societies to compete effectively in attracting new funds and retaining existing deposits. The rate offered by societies to investors dictates the mortgage rate level. Any attempt to hold down the mortgage rate artificially while at the same time raising the investment rate would have to be subsidised from some outside source. The cost of such a subsidy has been calculated to be of the order of £6 million to £7 million annually for every 1 per cent by which the mortgage rate was subsidised. To increase the investment rate by 1 per cent to have the ½ percentage differential, which operated at the low level of deposit up to recently, would therefore require an annual subsidy of the order of £9 million to £11 million. There is no way by which such large amounts could be provided from central funds without reallocation of the overall amounts available for housing purposes. This would undoubtedly require a reduction in the provision for the building of houses for those at present in need of rehousing, particularly if we were to have the subsidisation of those already adequately housed.
In the past money was found and the housing target of 25,000 a year was met.
It was discontinued in 1976.
When the interest had dropped down again. The urgent need was disappearing.
The question of subsidies is something we should be very careful about. I would prefer the Minister to be encouraging the setting up of new instruments for channelling moneys from pension funds and other institutional sources which tend to be more available at a time when mortgage rates are pushed up. We should not have to depend entirely on building societies as the source for funds. I would be very worried about the subsidy aspect of it. I would encourage new instruments for getting pension fund money and institutional funds into housing.
Question put and agreed to.
Section 13 agreed to.
SECTION 14.
Question proposed: "That section 14 stand part of the Bill."
Can the Minister say why this change is necessary?
This section would enable regulations made under the Acts to apply either generally or to specified classes of areas, houses, persons, works or other matters. This section would extend the general power to make regulations in section 5 of the 1966 Act by the addition of a new subsection to that section. The proposed subsection (4) would enable regulations under the Principal Act to be expressed to apply either generally, or to areas, houses, loans, persons, works or other matters of a specified class or classes. Different provisions of such regulations may be expressed to apply in relation to different classes of areas, houses, loans——
I can see that from reading it. However, I am anxious for the Minister to tell us in what way has the need arisen and how does he anticipate this new regulation might be made, in what part of the country or what type of houses?
It could apply to inner city areas, if necessary or feasible.
Yes, I see that.
Or to islands.
Question put and agreed to.
Section 15 agreed to.
SECTION 16.
Question proposed: "That section 16 stand part of the Bill."
I must express some sense of reservation about the discretion which is now given to housing authorities either to seek or not to seek a report from the medical officer in regard to priority in lettings. Can the Minister tell us what indication he has received from local authorities that they wish to have such a discretion given them? From any discussions I have had with officials of local authorities, it would appear that most of them are going to continue under the old system whereby they almost automatically seek medical opinion in regard to any application for tenancy allocation. They feel safer in doing so. After all, they obtain this service from the respective health boards on an agency basis. Since they are paying the health boards an agency fee for this service and other services, most of the local authorities would wish to continue under this system. It would give them a greater feeling of having covered every aspect of a person's application when they receive a report from the medical officer. I am not entirely satisfied that this discretion will work to the best satisfaction. It will lead to certain anomalies arising in regard to overall allocation. Some applicants will have a medical report on their files, and other will not, arising simply from a discretion exercised by a local authority official, who may for a number of reasons have decided in individual cases not to seek medical opinion or, on the basis of inadequate information, may have either sought a medical opinion or may not have. In the overall context it would be better to have a uniform system, either to have medical reports in all cases or not to have them at all. The existing system where local authorities must have regard to medical opinions in regard to allocation of tenancies is far preferable to this amendment whereby a discretion is given to the local authority official either to seek or not to seek such medical opinion.
The position is that this section was amended to a significant extent by the Dáil. The proposals as set out in the Bill before the House were widely welcomed by a number of local authorities. We must bear in mind the fact that the decision is one for elected members. As I understand it, the problems as regards getting in reports quickly on applications for rehousing and for the fixing of a housing priority list were not as acute in urban areas and in county borough corporation districts as they were in rural areas. In many rural areas the county council, urban district councils and town commissioners depended to a great extent on the staffs of the health boards, particularly the medical officers in charge of the community health services. Those staffs were very busy and housing work on behalf of housing authorities was not considered to be very high on their priority list. Most of their work was in relation to health matters. That is why it was decided to amend section 60 of the Principal Act and give the necessary options to the councils.
Question put and agreed to.
SECTION 17.
Question proposed: "That section 17 stand part of the Bill."
I should like to enter an objection to section 17. It is another attack on the autonomy of local authorities. The Minister proposes in section 17 to take power to tell a local authority to sell particular houses under section 90 of the Principal Act which authorises local authorities to sell their houses to the sitting tenants or to any other person in certain circumstances but it leaves it to the discretion of the local authority whether the stock of houses is to be sold or not. Section 17 gives the Minister power to tell a local authority, if he so wishes, to sell a house or not to sell a house of a particular class. This is another example of interference with the autonomy and powers of local authorities which has got a tremendous impetus with the total abolition of rates and the replacement of that type of financing by the type devised by the Government. In effect, the Government can now direct local authorities what to do and what not to do. This is an example of interference by central Government with local government; local government is becoming a misnomer and a branch of central Government.
The local authority, the body familiar with the conditions in its own area that would have to come to be considered in deciding whether or not to effect sales, is the best body to make a decision as to whether public housing should be sold or not. It is a drastic step for the Minister to propose to take power to tell a local authority what to do or what not to do in this sensitive area which is peculiarly local. I should like to know from the Minister why he feels it is necessary to take this power.
I should like to subscribe to the sentiments expressed by Senator Cooney on this section. As I mentioned on Second Stage, I see no good reason why this section should be introduced. Housing authorities, and their tenants, are close in the assessment of the development of purchase schemes. Heretofore, it was always the housing authorities who were the pioneers and sought the sanction from the Department for vesting schemes. In the final analysis, it is left to the tenant whether or not he avails of a purchase scheme. Under the existing scheme which is quite satisfactory, each two years or so, according to inflation, new purchase schemes were initiated and the option was left entirely to the tenant whether he availed of the scheme or not. This is new phraseology on a direction from the Department to a housing authority to sell particular houses and it could well be deemed as a direction to the tenants to buy houses. This is not the situation and I see no good reason for this section.
This is a precautionary measure. Tenants should be facilitated and those who want to purchase their houses should be allowed to do so in normal circumstances. There is always the danger that a local authority, for some reason or another, may decide that they would not have a purchase scheme for a number of years hence. In some other countries housing authorities have adopted a policy recently of not selling their houses to tenants who were anxious to purchase them. It is also important that the Minister should be in a position to direct housing authorities not to sell purpose-built houses such as dwellings for elderly people. It is important that this type of dwellings should not be lost to the national stock. At present local authorities have discretion as to the sale of any of their houses.
The section is giving power to Big Brother, the Department, to interfere with the activities of a particular local authority. The Minister has stated that tenants should be facilitated in buying their houses; tenants should be allowed buy their houses and that local authorities could decide that there would not be any sale of houses. He said that those were the reasons why he should take this power but what is the point of having a local authority if they cannot make those decisions within their own domain? Local authorities, for good and proper reasons, might decide that there should not be a purchase scheme of local authority houses in a particular area or street to a particular type of tenant. Their discretion should be allowed remain unfettered by any threat from Big Brother in the Custom House telling them what to do.
Can the Minister assure us that his direction will apply only to classes of houses and not to individual cases? I know of one case where, in hindsight, the best thing that could have been done was not allow a particular tenant to take a house under a purchase scheme. Having regard to all the circumstances of that unfortunate family it might have been as well if that family had not been allowed take the house under that scheme.
It applies to houses of a class only.
I should like to voice support for the Senators who have spoken about the taking of the discretion from the local authorities in this respect. I suspect that some local authorities might not be anxious at the moment to sell some of their houses because of the reasons I gave earlier under section 9. Local authorities are in a great position to judge whether or not certain tenants should be able to buy houses and whether or not certain schemes should be made available for purchase by tenants. Local authorities, and the Department, are at odds in certain respects on matters of policy and generally speaking there is a very poor level of communication and consultation between local authorities and the Department. That is to be regretted. I regret to see this section putting a further wedge between the local authorities and the principal housing authority, the Department. This is a matter of policy and the Minister has clearly made up his mind on this matter.
I am sure that all local authorities are anxious to sell houses under the usual terms of the purchase schemes, which are reasonable. It could happen that this section may never be used but it is important to have it particularly for the preservation of housing stock of a class by local authorities.
The Minister said that the section may never be used. In his initial explanation of the section he said that he knew of some local authorities at the moment who were not selling houses. Would the Minister enlighten us as to what he proposes to do about that? Can he say why they are not selling?
I did not say that at all.
Could I have one point clarified by the Minister in regard to the direction? He said it was in respect of a special category of house. Suppose the Minister used this power in relation to a special category and that a housing authority found it would not be in the best interests of a tenant within that category, his family or the housing authority that that house be sold, does this Bill mean that the housing authority would have to accept an application from that tenant?
Generally speaking this would be a matter for the housing authority.
We all know that in any large housing scheme there will be found a tenant who for his own or family reasons might feel it would not be in his or their best interests to vest the house in them for their future welfare and that the housing authority normally exercise that discretion to a very limited extent. However, I should not like to see that discretion taken from the local authorities.
The Senator can be assured that the Minister would not issue a direction to the local authority in cases such as the Senator mentioned.
Question put and agreed to.
SECTION 18.
Acting Chairman
Amendment No. 2 is related to amendment No. 1. Therefore amendments Nos. 1 and 2 may be discussed together.
I move amendment No. 1:
In subsection (1), page 13, between lines 32 and 33, to insert the following new paragraph:
"(b) The Minister shall make a decision on an application for a certificate under paragraph (a) of this subsection and notify his decision to the applicant within 21 days of the receipt by him of the application and if he refuses the application he shall specify, in the notice of refusal, particulars of his reasons for such refusal and should the Minister fail to make a decision on the application within the said period of 21 days the application shall be deemed to have been granted."
Section 18 has caused quite an amount of controversy. It is the section that provides for a new regime in relation to certificates of reasonable value. It provides for their granting and their application. It provides for regulations as to what information has to be given when they are applied for and, most significantly of all, it takes power to prohibit the making of loans within certain financial bands unless the borrower has a certificate of reasonable value. It provides also for failure to comply with the section henceforth to be a criminal offence attracting serious sanctions. It is a get-tough section with builders. Indeed one can sympathise with the Minister's desire to ensure that house purchasers get good value. At the same time we want to make sure that we do not devise a regime that would be counterproductive in terms of dampening down the activities of builders to a serious degree. I would hope the Minister would reassure me at some stage that this section does not contain within itself some sort of a hidden economic power to control the level of building in the country at any particular time. It might be a useful tactical exercise for the Department of Economic Planning and Development to influence the level of building at a particular time in the overall economic strategy. It would be a very nice, political way to be able to do it through the medium of the Department of the Environment and the non-issue, or the slow issue, or the issue with heavy conditions of certificates of reasonable value.
I should like the Minister to assure me that such considerations will never be a part of his thinking when it comes to considering the issue, non-issue or conditional issue of certificates of reasonable value; that the only considerations he will take into account in coming to his decision will be those applicable entirely to the net question of reasonable value, the cost of the building and the standards being applied in the building.
It is important that the public get good value. I sympathise with the Minister's wish to ensure through this mechanism that they will get good value, that these certificates will have to be applied for in great detail and that builders costings, so far as it is open to any third party to get behind the small print of a builders' costings, be examined to see that they are good value. At the same time we must be fair both to the builder and his customer. The customer could be prejudiced by failure to grant a certificate of reasonable value, prejudiced in that he could feel aggrieved with regard to not getting his loan or grant. It could be very important for many members of the public, the people whom this section sets out to protect, that the builder would get a certificate of reasonable value.
Consequently this new section has to walk a fairly delicate dividing line between the conflicting interests in this whole scene. One of the ways in which justice can be ensured is by providing for an appeal mechanism in a situation where a certificate is refused, the appeal mechanism provided being that the person——
Acting Chairman
I am sorry Senator, but we are discussing amendments Nos. 1 and 2 and not the whole section.
I am coming to amendments Nos. 1 and 2. The mechanism provided to ensure fair play for the builder, so to speak, is contained in subsection (5) where there is provision for appeals to the Circuit Court.
Amendment No. 1 does two things. It provides that where the Minister receives an application he must rule on it within 21 days and, in giving his decision on it, he must also give his reasons for his decision. In other words, if he refuses it, he must state within 21 days that it is being refused and give his reasons for the refusal. Amendment No. 2, which is related, seeks to compel the Minister to give reasons for his decisions; it does not specify a time limit. In effect what these two amendments require is (a) that the Minister gives his decision within 21 days and (b) if he refuses a certificate, that he gives reasons for so doing.
It is very important that there be a time limit placed on the Minister, that he gives his decision within 21 days. He is taking power under this section to make regulations calling for all sorts of documentation. If his regulations are complied with, as they will have to be, there will be full and ample information available on the application for the certificate to enable a decision be given within three weeks. Presumably there will be an expertise within the Department, there already from experience of dealing with these certificates at present, able to assess an application coming in with detailed information within three weeks. It is important from the point of view of the builder that he would not be delayed in his operation, important from the point of view of the house purchaser, whose uncertainty is going to be terminated, who will know that he will get his loan and/or his grant and important for the lending agencies that they will know that there is not going to be undue delay in granting these certificates. It would be an indication of the Minister's bona fides that there is no hidden economic reasons behind this section if he would accept an amendment that he had to grant it within 21 days.
It is important also that the Minister would give his reasons in his decision because the builder is entitled, when he is refused a certificate, to know precisely why. Natural justice requires that if a person is going to be prejudiced, or is going to have his position so seriously altered as to be refused a certificate of reasonable value, that he be given the reasons for so doing. There are ample cases—the most notorious recent one being that of former Commissioner Edmund Garvey—in which the courts laid down the principle that natural justice required that where a person's circumstances are going to be altered to his detriment, or indeed altered, he is entitled to be given the reasons therefor. In this case the Minister has no obligation to give reasons for doing such a serious thing as refusing a certificate of reasonable value. He merely says: "If I refuse you, you can appeal to the Circuit Court". In addition to natural justice, a second reason why the Minister should give reasons is to try to ensure that the issues that go before the court are specific. At present if a person appeals against a refusal, he lodges an appeal in the Circuit Court. But he does not know what he is appealing against; he does not know the case he will have to meet.
This is unsatisfactory from the point of view of court proceedings. It is part and parcel of our court proceedings that the issues before they come to court are set out on paper in advance so that the court and the parties know what is to be litigated upon. In this case there is no way in which that can happen. The Minister refuses a certificate and the builder appeals. What does the builder say? He is the moving party. He goes to court and says, "I appeal against the Minister's refusal". What will the court decide as between the Minister and the builder unless there are issues before the court? Will the court then hear the Minister respond, "We refuse the builder's application for the following reasons"? How will the builder get professional advice there and then so that he can instruct his counsel? How can the court make an assessment on these matters without a full trial before it? Natural justice requires the Minister to give reasons so that a person can know why he is being prejudiced, and satisfactory court procedure also requires that the Minister would give reasons. It is for these reasons that I tabled these two amendments.
I support what Senator Cooney has said and I urge the Minister to accept the amendments put forward. My view on section 18, which is the real bite in the Bill, is that it is not really a matter for the Minister. In relation to the issue of the CRVs the Minister will find himself acting in a judicial or quasi-judicial capacity and function. It is a little against the trend of legislation, particularly of the last Government, who established the office of the DPP who was independent of and apart from the Government. An Bord Pleanála, who are closely allied to this area, seem to be independent of and apart from the Government.
The Minister may say that the builder has the right to appeal in relation to a refusal of an issue of a CRV, but do the public have the right of appeal where the Minister grants a CRV to a person who, perhaps, ought not be granted one? I am not suggesting that the Minister or any member of the Government would act in an improper way. In an area like this, it is not a matter of Government attitude. Criteria can be laid down as to the standards a house must have, the area in which houses must be built and so on, and an independent body could be established to set up and adjudicate on these matters which affect people's livelihood, matters in respect of which people have certain natural rights.
Senator Cooney is correct when he says that a person will be denied access to principles of natural justice if he is expected to go to court to appeal against a decision not knowing the reason for the decision. Perhaps, in some manner in the regulations laid down, that can be overcome, but that is wrong. The procedure should be laid down here.
The reason I suggest that an independent body should have the right to decide on these matters is on the basis of an Adjournment debate in the Dáil a few weeks ago where a Member was concerned about the non-issue of CRVs. I do not know the facts behind that case, but a Minister has great power in that area and it is important that justice is not merely done but is seen to be done. This is one area where it may be abused—I am not suggesting by the Minister or any member of his Government. It is an area that could easily have been put in the hands of an independent body. I am not entitled to make such an amendment because it would change the entire meaning and sense of the section, but I support the amendments proposed by Senator Cooney and I urge the Minister to accept them.
I have some sympathy with the amendments, despite the fact that I am on this side of the House. In fact, I have grave reservations about the whole CRV operation. At the same time, I see the positive side and I realise, from conversations with the Minister and other people concerned, that it is an attempt to speed up the process of getting reasonable value for a house. If a larger body were involved, as was suggested by Senator Molony, it might slow it down even more.
Large or independent?
Independent means that An Bord Pleanála introduce all kinds of delays. That is why I have sympathy with the amendment. The notion of the Department dealing with it, but having a time limit on it, makes sense to me. If they will deal with it with alacrity let them do it; if they do not do it within a certain period of time, let the CRV be deemed to be granted at the requested level.
I would be worried about interfering with the market mechanism in relation to the price, protecting the people against the Department in relation to the price they would agree, because eventually the price will reach its market level. If things do not improve we might see some difficulties in relation to the price of houses and the number of houses built. I am all for speeding matters up and I have some sympathy with the amendment.
Amendment No. 1, which is identical to one tabled but not accepted in the Dáil, is designed to help builders who are applying for CRVs by ensuring that they get decisions inside three weeks, and that if they are refused CRVs, particulars of the reasons are stated. Although I, too, am favourably disposed towards both these objectives, I am not convinced that the acceptance of the amendment would, in the long run, be desirable as far as the builder is concerned.
In the first place, I will give my reasons for being opposed to the idea of a statutory time limit. Time-wise, a satisfactory standard of service has been provided to date and this is partly due to the absence of rigid time limits and the consequent flexibility which the present system allows. In the first six months of this year 1,338 decisions were issued and the average time taken for a decision was only 13 days. The number of cases taking more than a month is very small, about one in 20 according to a recent check, and these would usually involve some abnormal aspects which might necessitate a site inspection.
Even if one were to accept the idea of a time limit, it would have to run from the date of receipt of all necessary information, not from the date of application, since applications are frequently incomplete. The nature and extent of information required may very from one case to another depending on the amount of detail needed to justify the price, any abnormal factors affecting the price and so on. At present, many of the requests for further information and clarification are made on the telephone or during interviews where it is easier to explain what is involved and quicker than making formal written requests, as the amendment would require. For example, during the recent postal difficulties, the informal approach was of benefit to builders.
A time limit like 21 days might, in exceptional circumstances, be impossible to meet with resultant granting of CRVs by default—which I am sure the proposers of the amendment would not welcome. I am talking about a short-term situation which might arise following a decision to extend the CRV system with a resulting increase in the volume of applications. Here also we have to be realistic and recognise that it is extremely difficult to recruit the professional staff needed.
We must bear in mind that the Minister is answerable to both Houses of the Oireachtas for the administration of the controls and for any undue delays that might occur. On balance I suggest that in practice the imposition of a statutory time limit would not improve on the present standard of service.
The second part of this amendment would oblige the Minister to give details of reasons for refusing CRVs. At present, the only reason given is the obvious one: that the price exceeds the amount appearing to the Minister to represent reasonable value. I am aware that many builders feel that they should be given particulars of the reasons but I am afraid it is not as easy as it may seem at first sight. Here I might mention that the Coalition Government resisted similar requests for the same good reasons.
Section 18 (3) (d) and section 18 (4) deal with the question of excessive site costs. It could be argued that the remaining elements of the cost should be treated as one unit. This would not permit one to give a specific reason, such as "overheads are too high", or "roofing costs were too dear" because in the final analysis the cost of the various elements is irrelevant so long as the total price is reasonable. It often happens that a builder has paid over the odds for some element, but because of economy of building and management of operations succeeds in getting a CRV. Indeed, the information given by builders is often so inadequate or the price breakdown is so different from the Department's approach to the calculation of reasonable value that it is not possible to pinpoint accurately which elements are making the price higher than what appears to be reasonable. A builder's actual costs plus overheads and profit need not necessarily represent reasonable value. Other factors such as efficiency, good buying practices and so forth are also relevant.
A further point is that to go into detail about reasons for rejection would be tantamount to publication of my Department's criteria for the assessment of reasonable value so that builders would know my Department's figure for reasonable value before they ever apply. This would, in effect, put my Department in the position of fixing prices, which would not be a desirable situation especially since the majority of prices applied are lower than would be approved by reference to these criteria and the net effect might well be to push up these prices.
To impose a statutory requirement about particulars of reasons would mean that my Department would in every case have to look for much more detailed information from the builder than he has to submit at present or even than he may have at his disposal, even though such information may not be necessary to enable a CRV to be granted as is the case in the vast majority of applications at the moment. The provision of such information would add to builders' expenses, impose additional discipline on their operations, and delay the whole process. I do not think it would improve the position as far as the vast majority of builders are concerned.
Finally, I suggest that the need for an amendment of this nature is not as great as previously, in view of the additional safeguard being proposed in subsection (5) namely, the granting of a right of appeal to the Circuit Court against the refusal of a CRV. I should also mention in this context that the detailed basis of the calculation of reasonable value is at present being reviewed with the involvement of a prominent quantity surveyor nominated on a confidential basis by the Irish House Builders' Association. I trust that this explains why I cannot accept these amendments.
Before concluding, however, I should like to repeat the Minister's promise to the Dáil that, in the context of forthcoming discussions with representatives of the house builders, he would consider the possibility of indicating to applicants for CRVs in a broad and less formal way which particular element appears to be making prices unreasonable. I stress again that in the vast majority of cases being examined at present it is not possible to say why the price should not be reasonable because of the lack of information from the applicant, so that these discussions will only be relevant in cases where sufficient information is available. Some Senators raised the question about Circuit Court procedures for dealing with appeals and Senator Brugha raised one aspect of this on Second Stage which I promised to reply to on this Stage.
The CRV appeals are a new function of the Circuit Court. There are no established procedures or rules of court for the handling of the appeals. When the Bill becomes law it will be a matter for the Circuit Court rules committee to draw up rules of court if it considers such rules to be necessary. These rules would, if drawn up, regulate such matters as the form the appeal should take, submission of observations by the Minister, time limits and so forth. If there are no rules it will be a matter for the court to decide on procedure.
There are some points in the Minister's reply to the amendment. I should like to compliment him on his reply. Any person who can find the worth that he found in the postal dispute must certainly be complimented. It is an ill wind that does not blow some good.
I accept what the Minister has said in relation to a period of 13 days to issue a certificate of reasonable value. The whole system of certificates of reasonable value has more or less collapsed. The only way one can judge this is to judge what percentage of houses built in the country are now built with a certificate of reasonable value going with them. I am sure the Minister accepts that the number has shrunk very appreciably in the last few years. If this section as it stands becomes law a greater percentage of houses built will be required to have a certificate of reasonable value. It is likely, because of that, that delays will become far greater.
The regulations in relation to certificates of reasonable value are a good deal more complex than they were in the past. It follows that it will take a longer time for officials to consider them. If the Minister is able to tell us that he will increase the staff of that particular section in his Department sufficiently to deal with the new influx of applications, perhaps that might get over it. I would not be satisfied even with that. It is an area in which we are dealing with people's livelihoods and they are entitled to a response within three weeks.
It seems also it is against the trend, for example, in our planning legislation. If a person does not get his planning permission decision within two months or reasons why not, he will automatically get the permission. I know of people who have applied and who have received queries from the planning authority within the two months period. It is solely to keep open the issue whether or not they are getting planning permission. This is a most unsatisfactory system.
With regard to the reasons the Minister gave for refusing to give reasons to people who are refused certificates of reasonable value, I find it very hard to accept the logic of what he says. I do not think it is that bad an idea that builders should know of the criteria that the Department use in deciding whether to grant or refuse the certificates of reasonable value. Certainly, when the appeal system in the Circuit Court emerges, it is inevitable that builders will know of the criteria used. I cannot imagine how the Minister envisages this court system will operate. At the moment it is not intended to give any reasons. Is it proposed to give evidence at all to the court? Will the Department inspectors go into the court and say: "We cannot discuss our criteria here because we would be letting the builders know how we judge their applications"? I honestly believe that when the Circuit Court rules committee get together and look at this their minds will boggle at the difficulties they will be faced with by way of procedures. Presumably, all that will be involved is the notice of appeal, the matter will go on to the Circuit Court, the judge will have nothing to look at beforehand to assess what the case is about and he will have no idea what issues are there. The Minister says that the builder is not going to know about them. Therefore, the builder will go into court, he will move the case and his counsel will stand before the court and say: "My Lord, we were refused a certificate of reasonable value". At that stage he will sit down and the judge will turn to the Department's counsel and say: "What happens now? Where do we go from here?" It seems to me that the whole system is a little bit convoluted and requires a good deal more thought before it is implemented.
It seems to me that the Senators on the opposite side must have come to the conclusion by now that the Minister is not prepared to concede the principle in the two amendments. A part of the explanation may be the fact that the previous administration also were not prepared to concede the same so far as I can gather from what the Minister said.
It is a different system altogether.
There are other precedents that are not followed.
An Leas-Chathaoirleach
Senator Brugha, without interruption.
I am not speaking for the amendments which I do not think have much hope of being accepted by the Minister. It seems to me that underlying all of this is the desire on the part of the administration which is represented by the Minister to try to ensure that the price level be kept as low as possible. That is the principle on which this whole thing is based. I have doubts about the correctness of the position being taken up by the Minister where he will not explain the reasons for refusing a certificate of reasonable value though I concede that in section 5 he has gone some of the way to meet the case by agreeing to a 21-day period in which to reply. In his reply he also satisfied me that there may be a way out of this subsequently in relation to setting out some of the criteria. In view of the fact that it is in the public interest that the Minister does not wish to disclose the reasons for rejection, I want to put to him the question that I put to him before. That is, what exactly is the case going to be before the Circuit Court? The Minister in replying to that gave an answer but one which did not answer the question. I think he said that the court would have to set out some rules of its own. It seems to me that some formula will have to be found which, without giving away the secrets the Minister wants to keep to himself in the public interest, will cover this area. I cannot see how one is going to withhold from the Circuit Court the necessary information setting out the grounds for refusal. So I see this as merely a means of postponing for the time being the decision in regard to what the Minister intends doing. While I support the section, because I believe it is in the best interests of the public, I think the points being put by the opposite side about refusal to give reasons is one that needs to be examined, at least at a later stage.
I am concerned, too, about the question of criteria. I am glad to know, and this should be emphasised and be made as public as possible, that the Department intend to consult with an unnamed qualified professional quantity surveyor agreed with the builders' association. I did know about it but I do not think it was as widely appreciated by those concerned as it ought to be. I am always concerned when a matter like this, which is a professional matter, has to do with the profession of quantity surveying, finds its way into administrative procedures in civil service departments. I should hope that those who look at this and make judgments based on movable criteria or unknown criteria or unknown standards of measurement would be well qualified to do that. I am just a bit concerned about that and that is why I have reservations about the whole CRV method. I am also concerned about the courts being brought in constantly. Everything that is going on in this country at the moment seems to end up being resolved by lawyers. It goes outside the profession of engineering; it goes outside the profession of medicine; it goes outside the profession of legislators and is something about which I am quite concerned. I should not be talking about it on the amendment but I am entitled to my concerns.
All I know about the CRV system as it operates at the moment is that everywhere I go I get complaints. In the constituency where I am operating, places like Griffith Court or Phillipsburgh Avenue, I am inundated with people's problems and I cannot help thinking that there cannot be smoke without some fire. I hope that the system will work. I can see that there are improvements in it; I can see the spirit behind the Minister's intention and the intention of the departmental officials, but I am afraid they might be tying themselves down and making life more difficult for themselves in the future. It is certainly making life more difficult for the builders.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In subsection (5) (a), page 14, line 33, after "decision" to insert "and the reasons therefor".
Amendment put.
The Committee divided: Tá 16; Níl 21.
Tá
- Blennerhassett, John.
- Burke, Liam.
- Butler, Pierce.
- Connaughton, Paul.
- Cooney, Patrick Mark.
- Governey, Desmond.
- Harte, John.
- Howard, Michael.
- Kilbride, Thomas.
- Lynch, Gerard.
- McCartin, John Joseph.
- Markey, Bernard.
- Molony, David.
- Murphy, John A.
- O'Brien, Andy.
- Staunton, Myles.
Níl
- Brennan, Séamus.
- Brugha, Ruairí.
- Cassidy, Eileen.
- de Brún, Séamus.
- Donnelly, Michael Patrick.
- Ellis, John.
- Harney, Mary.
- Herbert, Anthony.
- Hyland, Liam.
- Jago, R. Valentine.
- Kiely, Rory.
- Kitt, Michael.
- Lambert, C. Gordon.
- Lanigan, Michael.
- McGlinchey, Bernard.
- McGowan, Patrick.
- Mulcahy, Noel William.
- O'Toole, Martin J.
- Ryan, Eoin.
- Ryan, William.
- Whitaker, Thomas Kenneth.
Tellers: Tá, Senators Burke and Harte; Níl, Senators W. Ryan and Brennan.
Amendment declared lost.
An Leas-Chathaoirleach
Amendment No. 3 has been ruled out of order.
Amendment No. 4 not moved.
Section 18 agreed to.
SECTION 19.
Question proposed: "That section 19 stand part of the Bill."
The Minister may find it necessary to provide for persons other than peace commissioners to take these declarations. When I left office I was pretty satisfied that there were sufficient and well qualified peace commissioners all over the country.
Question put and agreed to.
SECTION 20.
Question proposed: "That section 20 stand part of the Bill."
Would the Minister tell us briefly why he proposes to nationalise the building societies under section 20?
It is not proposed to nationalise the building societies.
That will be the effect of it.
Question put and agreed to.
Sections 21 to 24, inclusive, agreed to.
Schedule agreed to.
Title agreed to.
Bill reported without amendment.
Agreed to take remaining Stages today.
Bill received for final consideration.