This Bill represents a significant step towards full implementation of the package of measures relating to unemployment and taxation announced by the Taoiseach in October last. Taken together with the revised scheme of house improvement grants and the provisions of the Finance Act, 1986, it will provide a major stimulus to the renewal of inner-city areas.
The immediate origins of the Bill are to be found in the recommendations of a working party established by the Government to report on the best approach to be adopted in relation to the Custom House Docks site in Dublin. The working party reported to the Government in October 1985. It recommended the establishment of a special statutory authority with responsibility for securing the redevelopment of the site and to promote the redevelopment effort. The Government accepted these recommendations and decided that taxation incentives should be used more widely to promote the renewal of other inner-city areas where dereliction and decay are most extensive and pervasive.
Arising from these decisions, a broadly-based programme is now being initiated to secure the revitalisation and re-building of the older core parts of our larger urban centres. Details of the specific areas to which special attention is to be given have already been announced and the areas are formally described in the Fourth Schedule to the Finance Act, 1986. I have arranged to have maps of the areas in question placed in the Oireachtas Library for the information and assistance of Members.
The present Bill and the initiatives now being taken by the Government represent a more comprehensive, positive and effective approach in urban renewal than was envisaged in any previous proposals. The basic premise on which this approach is based is that the inner areas of our major urban centre represent a very valuable resource in terms of people and community life, public buildings, business, commercial and cultural centres, infrastructure and other urban amenities. Resources of this kind cannot be allowed to suffer from neglect or dereliction without heavy costs in terms of social problems, physical decay and massive demands for heavy investment in other locations.
For many years, the inner cores of our larger urban centres have been decaying and large areas have become derelict. The factors which inhibit the redevelopment of such areas are well known. Site acquisition and development costs tend to be high; there are environmental and social problems and there has been a movement of established industries and other commercial activity to suburban locations. These and other factors have contributed to a process which is difficult to reverse.
The situation in our inner-cities would, in fact, be far worse but for the efforts of local authorities and the various other agencies who have worked strenuously over the years to reverse the trend. For example, local authority housing of a high standard is being provided in inner-urban areas, especially in Dublin. But efforts to encourage private housing development in inner city areas have had little or no success and activity by the private sector in general has been painfully slow in securing the redevelopment of such areas. All the evidence suggests that matters will get considerably worse unless a major effort in made to redress the situation. Such an effort requires Government intervention of the kind which is now being provided for.
It is widely accepted that the north inner-city area of Dublin has suffered most in terms of dereliction and physical decay over the years and has failed to attract new development of the kind undertaken elsewhere in the city. Only 15 per cent of the office space provided in Dublin, for example, between 1960 and 1984 was located on the north side of the city.
As is well known, the Custom House Docks site, which is in the ownership of Dublin Port and Docks Board, comprises a total of 27 acres, including some seven acres of docks, on the northern side of the River Liffey and lying immediately east of the Custom House and Amiens Street. The site is relatively close to the commercial centre of Dublin City but it is underutilised and is in a rundown condition. Outline planning permission was granted to Dublin Port and Docks Board in 1982 for intensive development on the site for office, industrial, residential and shopping uses but this development was not proceeded with.
The Custom House Docks is of significant social and civic importance and could not be left undeveloped without considerable repercussions for the surrounding area but the working party concluded that the site would remain undeveloped for the foreseeable future, for ten to fifteen years at least, if matters were left to the normal operation of the property market. It was also the view of the working party that a less intensive and more socially oriented development than that provided for in the existing outline permission would provide the best basis for the development of the site itself and provide a catalyst for the improvement of the surrounding area and the north inner-city generally. It was obvious, in view of the history and location of the site, and the sheer scale of development involved, that special efforts would be required to secure its early redevelopment. The working party recommended, therefore—
—the establishment of a statutory authority with planning functions to secure and control redevelopment of the site, and
—the provision of a package of incentives by way of taxation and rating reliefs to encourage development and to attract occupiers.
These recommendations were accepted in full by the Government and the present Bill, together with the Finance Act, will give effect to them.
I must emphasise that it was the view of the working party, and of the Government, that the establishment of a new authority, or the introduction of a simplified planning control regime, would not of themselves be sufficient to bring about development of the scale envisaged on the Custom House Docks site. It was accepted that, in addition, there would be a need for a real commitment from the Government in the form of taxation incentives both to encourage development and the occupation of new or refurbished buildings on the site. In this regard the approach now being pursued by the Government differs significantly from earlier proposals relating to the site.
The Government are satisfied that the establishment of a separate single-purpose new authority is necessary in relation to the Custom House Docks site. The scale of development involved requires a unified and comprehensive approach to promote and control development. Besides, the site is unique in that it is in the hands of one owner which itself is a public body. These conditions do not apply in any of the other areas proposed for designation. In these areas, the Government are satisfied that the proper approach is to provide the financial incentives to generate a demand for development and to leave the general coordination and control and development proposals to the local planning authorities.
The Bill provides for the designation of the inner urban areas which are in need of renewal and for the application of rates relief to promote redevelopment in these areas. The areas intended for designation under the Bill are, of course, the areas already described in the Fourth Schedule to the Finance Act. That Act also provides for the other financial incentives decided on by the Government. These include capital allowances for the construction or refurbishment of commercial buildings, the granting of relief to lessors under section 23 of the Finance Act, 1981 for the provision of dwellings for letting, the granting of relief to owner-occupiers for expenditure on the construction or refurbishment of dwellings and double-rent relief for traders occupying newly constructed or refurbished buildings.
The capital allowances will be available, for income tax and corporation tax purposes, in respect of commercial buildings and structures, including offices, shops, leisure and car-parking facilities, on the same lines as the allowances available for industrial buildings and structures. The allowances will generally be given in respect of the cost of construction work carried out in the period from 23 October 1985 to 31 May 1989, but, as respects the Custom House Docks area, will apply for the five-year period commencing on the date of approval of the planning scheme for the site under section 12 of the Bill.
The allowances in question are, in general, a 50 per cent initial allowance and a 4 per cent annual allowance, with free depreciation for owner-occupiers. However, as regards the designated areas in Dublin other than the Custom House Docks area, only one-half of those allowances will be available.
The relief being made available to lessors under section 23 of the Finance Act, 1981 will apply to the construction or conversion cost of dwellings provided for rental in the Custom House Docks area in so far as the work is carried out in the five-year period commencing when the planning scheme for the area is approved. This relief will be available against all such rental income of the lessor and not merely the rental income from the premises in respect of which relief was given. The normal rules relating to section 23 relief in regard to such matters as the size of flats or houses, the letting of premises for ten years and compliance with standards of construction will operate.
A special new tax allowance will be available to owner-occupiers in respect of a dwelling newly-constructed or refurbished during the period from 23 October, 1985 to 31 May 1989, in certain designated areas in Dublin, Cork, Limerick, Waterford and Galway other than the Custom House Docks area. The allowance may be claimed in each of the first ten years of the life of the dwelling following construction or refurbishment, provided that the dwelling is the sole or main residence of the individual concerned. The annual allowance will be equal to 5 per cent of the expenditure incurred by the individual, excluding site costs and net of all grants payable to him.
A double rent allowance as an expense in computing trading profits for tax purposes will be available to traders in the Custom House Docks area and in the designated areas in Dublin, Cork, Limerick, Waterford and Galway. The relief may be claimed for each of the first ten years of each new lease entered into by traders during the period from 23 October 1985 to 31 May 1989, or, as respects the Custom House Docks area, during the five-year period commencing when the planning scheme for the area is approved.
The new allowance being provided will apply in addition to all other existing incentives such as income tax relief on mortgage interest, allowance under section 23 of the Finance Act 1981 for the provision of rented residential accommodation and capital allowances for the construction and refurbishment of industrial buildings. All these incentives taken together represent a comprehensive package aimed at stimulating an early and positive response from the private sector.
The inner-city areas in each of the five county boroughs to which the tax incentives will apply are those where dereliction and decay are extensive and which are likely to remain undeveloped unless special measures are taken. The areas are so located that their redevelopment will have a major impact and bring about a change in the unfavourable perception of inner-city areas as locations for investment and development and as places for people to live and work. The range of incentives now available should create a suitable financial climate for large-scale investment by the private sector in these areas and generate the confidence that would lead to a self-sustaining urban renewal process in the years ahead.
I have already requested local authorities to put their full weight behind the new measures. I have asked them to see themselves as development brokers, bringing landowners, developers and potential investors together where necessary, doing everything they can to facilitate development proposals, and using their full powers under the Planning Acts to promote and facilitate development. Specifically, I have put it to the local authorities that they should—
—appoint a suitable senior officer to act as development co-ordinator, to liaise with potential developers and to facilitate their dealings with the Corporation departments;
—review their development plan, where necessary, to remove inflexible or out-of-date provisions;
—use their compulsory land acquisition powers, where necessary to ensure that sites of suitable size and shape are available for development and to overcome title problems which private developers may experience;
—make land owned by them — especially derelict or vacant sites — available, on reasonable terms, for development or carry out early development themselves on the land;
—give special attention to the improvement of the appearance and general environment of the designated areas by way of better street cleansing and refuse collection, deal ing with fly-posting, grafitti and obtrusive and unsightly advertising and other hoardings, the initiation of programmes of environmental improvement, the maintenance of footpaths, roads and public lighting, the implementation of pedestrianisation schemes, the improvement of street furniture to enhance its appearance and to remove clutter and the preparation of design guidelines to encourage attractive designs of building, shop fronts and facades generally.
The response of local authorities has been positive and encouraging and I am certain that all concerned can count on their whole-hearted co-operation. It is now a matter for private sector interests immediately to set about formulating their plans so that the maximum amount of construction work will qualify for relief.
I wish to make it clear at this stage that there are no proposals for the extension or modification of the designated areas or for the application of the incentives to areas other than those already announced. Great care has already been taken, in consultation with officials of the local authorities concerned in the selection of the areas to which the scheme should apply. I am not suggesting for a moment that the areas which are being designated are the only areas which suffer from dereliction but they are the areas where redevelopment would make maximum impact on the physical appearance of our inner cities as well as on the perception of inner-city areas as suitable locations for investment and development and for people to live and work. As many as possible of the problem areas identified by local authority officials were included subject only to ensuring that attention was focussed on the areas most in need of redevelopment. The incentives being made available in the designated areas have a limited life span and there should be no false expectations about their extension. The construction industry, property, business and commercial interests should quickly get together to devise suitable schemes of development and redevelopment which can be got underway in the designated areas. We are dealing with a once-off special offer for a limited period only. I hope that it will be treated as an opportunity not to be missed.
The general approach of the Government to urban renewal avoids many of the unacceptable features of the proposals contained in the Urban Development Areas Bill, 1982 and provides a simpler but far more effective strategy for actually achieving the objective. There are no proposals in the Bill for the establishment of a large number of urban development commissions or bodies to take over the planning and other functions of local authorities in relation to areas designated for urban renewal. On this point I would mention that a good deal of the debate in the other House related to the area of the mediaeval walled city of Dublin and the fact that a special authority for that area is not being established. I think it is important clearly to distinguish the differences between the Custom House Docks site and the area of the mediaeval walled city. The Custom House Docks site is a single site of 27 acres in an underutilised and run-down condition and in the hands of a single owner which is itself a public body. Virtually the whole site is capable of redevelopment and the function of the Custom House Docks Development Authority will be to secure its early redevelopment. The area of the mediaeval walled city, by contrast, like other areas of the city enjoy a wide range of uses and diverse ownership. Responsibility for planning control and development for that area rests properly with Dublin Corporation which is the local planning authority for the area. I am aware that in the current review of the Development Plan for Dublin City, special attention is being paid to the needs of the walled city area in terms of overall development objectives for the area and the conditions which might be attached to planning permissions for development in the area.
A detailed explanatory memorandum has already been circulated with the Bill and so I propose to deal now only with its main features.
Section 6 of the Bill will enable the Minister for the Environment, with the consent of the Minister for Finance, to designate areas in which there is a special need to promote urban renewal. As I indicated earlier, the areas proposed for designation have already been determined and are described in the Fourth Schedule to the Finance Act, 1986. These same areas will be designated under section 6 as soon as the Bill is enacted.
Section 7 of the Bill provides for the making of schemes for the remission of rates in respect of premises in designated areas and these schemes will be made as soon as possible after the enactment of the Bill. The intention is that there will be full remission of rates for ten years on new buildings constructed in a designated area between 23 October 1985 and 31 May 1989 and full remission of the rates on any increase in the valuation of enlarged or improved buildings.
Sections 8, 9 and 10 provide for the establishment of the Custom House Docks Development Authority and for the functions of the authority. The authority will consist of a chairman and four ordinary members appointed by the Minister. It will basically be a single-purpose, ad hoc authority charged with the task of securing the redevelopment of the Custom House Docks area. The size of the authority, both in terms of its membership and staffing arrangements, is being kept to the minimum consistent with the effective performance of its task. It will be an executive rather than representative body. It will acquire, hold and manage land for development by itself or others; prepare a scheme or schemes for development, redevelopment or renewal of land in the area; develop or secure the development of such land; provide infrastructure and carry out works of amenity development or environmental improvment.
The type of persons to be appointed as members of the new authority will be selected on the basis of their expertise and experience in relation to such matters as land acquisition and disposal, estate management and development, commercial and financial management and experience in local government and public administration. The staffing arrangements and other services required by the authority will obviously vary over the various stages of the project and the Bill, therefore, provides for flexible arrangements whether by way of direct employment of staff under section 20, the engagement of consultants under section 21 or the use of services or staff provided by the Minister or any other statutory authority under section 8 (5). The authority will have all the powers necessary to undertake and complete the task assigned to it, following which it will be dissolved under section 22.
Section 12 is an important provision which deals with the position of the authority in relation to the physical planning system. The provisions of this section are carefully framed with a view to harmonising as closely as possible with the normal operation of the physical planning system but, as the same time, ensuring that the objective of initiating and securing the redevelopment of the area can be achieved with the minimum of delay on a properly planned basis.
The authority will prepare a planning scheme for the site and the carrying out of any development which is consistent with that scheme will be exempted development for the purposes of the Planning Acts and will not, therefore, require-planning permission in the ordinary way. Safeguards are, however, being incorporated to ensure that a reasonable balance is maintained between the need to promote early development on the site, and the need to provide for public participation and compatibility with the objectives of the planning authority as set out in the Development Plan for Dublin City. In the first instance, the authority will be required, in the preparation of the planning scheme, to consult with Dublin Corporation, to have regard to the development plan for Dublin city, to receive and consider submissions from interested parties and to comply with any general directives issued by the Minister under section 9 of the Bill. Second, the authority will be required to submit the planning scheme for approval by the Minister and, at the same time, send a copy of the scheme to Dublin Corporation. Third, the Minister will be required to consider any objections to the scheme made within one month by Dublin Corporation and, following consideration of any such objections, it will be open to him to approve or amend the scheme in such manner as he thinks proper. The carrying out of development on the site will be exempted development only if consistent with the planning scheme so approved. Any amendments which the authority wish to make to the planning scheme will be subject to the same procedures as the original scheme. These arrangements should constitute an acceptable framework for the discharge of their functions by the authority without unduly disturbing or conflicting with the established principles of the physical planning system.
Section 13 of the Bill provides for the transfer to the authority of land in the Custom House Docks area now in the ownership of the Dublin Port and Docks Board and for the payment to the board of proper compensation for the land so transferred. The actual amount of compensation to be paid will be determined by the Minister, with the consent of the Ministers for Finance and Communications. The value of the land is to be taken, for the purposes of that determination, as the open market value of the land immediately prior to the announcement by the Taoiseach on 23 October 1985 of the proposals to confer a range of taxation advantages on development on the site. This is consistent with the established principles for the determination of land values in cases of compulsory purchase.
Sections 14 to 19 generally deal with the financial arrangements for the new authority. There is provision for the making of grants to the Authority by the Minister in the first two years of its existence, power for the authority to borrow funds not exceeding £10 million, and power to make advances not exceeding £5 million to the authority from the Central Fund. Provision is also made, in section 17, whereby the Minister will have power to issue general directives to the authority in relation to the conduct of their financial affairs and the application of profits or other income or funds of the authority. It is envisaged in this regard that the authority will generally be self-financing and that their operations will not become a burden on the Exchequer. It is quite possible, in fact, that surpluses will be incurred by the authority and that their operations will enable them to make contributions to the Exchequer to the advantage of taxpayers generally.
Sections 18 and 19 require the keeping and auditing of accounts and the making of annual reports by the authority. Section 22, as I have mentioned already, provides for the dissolution of the authority when their services are no longer required and for the necessary consequential matters such as transfer of staff and property. The schedule to the Bill describes the area for which the authority will be responsible. The boundary has been drawn by reference to public thoroughfares rather than by reference to property boundaries but it is only land owned by the Dublin Port & Docks Board in the area which can be transferred to the new authority.
The Custom House Docks site has been the subject of a good deal of controversy for a number of years. It has also been a subject of concern for many people that whatever action may be taken in relation to it should properly reflect the unique importance of the site and its potential to make a significant contribution to the ongoing development of Dublin City. The existing dock system on the site was completed more than 150 years ago. We now have an exceptional opportunity to revive this special site and to develop new uses and activities there in a manner which will influence and enhance the future of the inner-city of Dublin for future decades. By doing so, we can revitalise also the whole surrounding area of the north inner-city.
I am confident that the proposals contained in the Bill will bring about the revitalisation not only of the Custom House Docks site but of the other designated areas as well. I am also confident that the project will be welcomed by the community as a whole and I have no hesitation in commending the Bill to the House.