Seanad Éireann debate -
Thursday, 25 Jun 1998

Vol. 156 No. 5

Urban Renewal Bill, 1998: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

I am pleased to be here today on a matter that I know is of great interest and importance to the Members of the House. I am sure nobody here will forget the economic conditions which prevailed in the 1980s, conditions which discouraged investment generally, and led to no investment at all in our less attractive urban areas in particular. There is no doubt that much of the development which the tax incentive based urban renewal schemes has brought about would not have occurred without the benefit of those incentives and it certainly would not have happened in the areas where it has taken place.

It is not an overstatement to say that the success of the various urban renewal initiatives taken since 1986 has far exceeded everyone's expectations. Much of the large scale dereliction and urban decline which prevailed until the late 1980s has been eliminated. Areas previously written off have attracted extensive investment in commercial and residential development, bringing new life to the core of cities and towns which were in serious decline. We must acknowledge, however, that we have been fortunate the later years of the urban renewal schemes have coincided with the strongest period of growth we have ever experienced. That is not to say that physical decline in urban areas is no longer a problem.

It is now reasonable, however, at this time of strong economic growth, high levels of investment, a booming construction industry and pressure on house prices, to question the need to continue with the tax incentive based urban renewal schemes. My response to that question is that, provided we start to look at urban renewal from a different point of view, then there is most definitely a very strong case to continue with the scheme. Such a new perspective is one which takes account of the social dimension to urban renewal policy.

The Bill before the House provides for a new urban renewal scheme, one of the key goals of which will be to nurture and enhance the social dimension to urban renewal. This requires the integration of issues such as community development, education and training, employment and local economic development opportunities into our future plans for physical urban renewal. The objective will be to ensure that the benefits of urban renewal accrue to the many less well off communities in disadvantaged urban areas and not just to developers, investors and new residents. This new policy focus is intended to be responsive to the deep rooted spatial, socio-economic divisions in many urban areas. It also forms part of the new public policy approach to tackling poverty and social exclusion — reflecting the growing view that marginalisation and poverty can only be addressed through changes in core policies and service delivery structures and systems.

Urban disadvantage and poverty can be linked in three ways. First, there is a higher risk of poverty in areas of urban deprivation. Almost one-third of all poor households live in public housing in our five main cities. Second, there is evidence that residents of urban areas with high poverty concentrations experience cumulative disadvantage in terms of long-term unemployment, educational disadvantage and social isolation. Third, the quality of life in areas of urban disadvantage is significantly inferior to that in more affluent areas in terms of crime levels, drugs, environmental conditions and socio-economic features such as access to banks and shops, local business activity and the provision of recreational amenities.

The Government's national anti-poverty strategy recognises that tackling poverty in Irish society cannot be left to social welfare mechanisms alone. Intervention across a wide cross-section of public policy measures is required. Disadvantage in urban areas is one of the five key themes of the strategy, with urban renewal identified as one of a number of policy actions which can make a contribution to achieving the objectives of the strategy. It is vital therefore that urban renewal programmes for the future identify the potential community gains arising from initiatives in this area, including measures to increase local employment, support the development of local economic bases and provide for social housing and environmental improvements.

In 1996, ten years after the first urban renewal scheme commenced, it was time to carry out a review — informed by an in-depth study — of the schemes as they have operated up to now. Such a study was commissioned from a team of consultants consisting of KPMG, Murray O'Laoire Architects and the Northern Ireland Research Centre. The report from the consultants suggested that physical urban renewal can no longer be seen to operate in isolation. The delivery of wider economic and social benefits under the scheme in future would require a more focused, integrated strategy. The consultants made the following statement:

Urban renewal must address the physical, economic, social and environmental regeneration of urban areas having regard to the local situation, the overall situation and any individual conditions. As such, the diversity of issues urban renewal policy must address, has led to the conclusion that, in the future, measures and programmes for renewal must be linked to area based integrated strategic planning.

Taking account of the recommendations from the consultants the key elements in the new approach to urban renewal which the Government has adopted are as follows: the new scheme will provide for a more targeted approach to the award of urban renewal incentives, both in terms of their scale and in the areas to which they will apply; under the new scheme designations for urban renewal will be based on the concept of integrated area plans, which will address not only issues of physical development such as appropriate use, quality of design and conservation, but will also cover wider issues of local socio-economic benefit, including training, education and social housing; integrated area plans will have to identify targeted, focused sub-areas for designation, justify the proposed designation by reference to the objectives of the plan and indicate the basis on which incentives are sought.

Shortly after the Government took office last year I appointed an expert advisory panel to assist me in preparing for the new scheme. The panel's terms of reference included the provision of advice on guidelines for identifying priority areas for which plans should be prepared and on the suggested content of plans. The panel has also been asked to assess the extent to which completed plans comply with the guidelines with a view to providing advice to me in the making of recommendations in relation to proposals for designation. Guidelines as finalised by the panel were subsequently issued to county councils and county borough corporations which were given responsibility for identifying and prioritising the most appropriate areas for which plans might be prepared having regard to the criteria laid down in the guidelines.

The criteria for selection of areas for which plans should be prepared included relevant development plan policies and objectives, the extent of physical decay and social and economic disadvantage in the area, the need for incentives to support development in the area and the capacity to benefit from such incentives, together with the potential for synergy with other area based plans and programmes.

On the important issue of the size of urban areas most likely to be suitable for consideration under the new scheme, the guidelines made the point that few towns of less than 6,000 population received designation under the schemes up to now and that such towns would be likely to have even greater difficulty qualifying under the criteria for the new scheme. This indicative population level has been the subject of debate since the guidelines were issued. My response has been that the guidelines did not seek to set a minimum population threshold as such for the new scheme.

The population level mentioned is of an indicative nature only and does not equate to setting a strict population threshold as such. It does, however, reflect the fact that the scheme is concerned with urban renewal and that it must therefore, of its nature, be confined to areas with strong urban characteristics. The indicative population level also reflects the fact that the successful implementation of a scheme of this nature in an urban area requires a minimum level of scale.

A number of requests to have the 6,000 population guideline reduced were received. The issue was considered by the expert advisory panel as part of its overall consideration of the guidelines for the new scheme. The panel's recommendation was that the 6,000 guideline should remain unchanged on the basis that while it is only a guideline, it provides a reasonable baseline indication of the minimum size of urban area likely to be able to meet the criteria for designation under the scheme. We must remember that we are talking about urban renewal, not village or small town renewal. No town will, however, be excluded solely on the basis of population. All the criteria spelt out in the guidelines will be taken into consideration.

The designation of an area for tax reliefs under the new scheme can only be considered if it falls within an urban area which the relevant local authority decides is a priority area for which an integrated area plan has been prepared. In that context, if a town with a population of less than 6,000 was considered to be a priority, the relevant local authority must, as in all other cases, demonstrate clearly how that area meets the criteria for the new scheme.

As regards the content of integrated area plans, the guidelines for the new scheme make it clear that these plans should create a vision for the future of the area to which they relate which balances physical development, economic and community development, conservation and environmental and amenity improvements. Within core urban areas in particular, conservation of the built environment is expected to underpin the strategy of any plan for such an area.

The consultants' report on previous urban renewal schemes recognised that a number of excellent conservation initiatives had been undertaken in designated areas under the schemes operating up to now. The report found that it was in those areas where conservation objectives have focused on the reinforcement of the essential character of an area that they have been most effective. However, in many designated areas the practice of conservation, according to the consultants, simply resulted in the gutting of buildings and the retention of facades. This may have been variously attributable to the difficulties of complying with statutory building and fire regulations, the misfit between new uses and old buildings or the widely cited problem of cost.

To facilitate reconstruction and improvement work on existing buildings, my Department has issued revised technical guidance on the national building regulations which took on board a number of suggestions from the Royal Institute of Architects in Ireland. The institute, in partnership with my Department, is currently working on a further special technical guidance document for work carried out on buildings of outstanding architectural and historic importance, including listed buildings.

The urban renewal scheme consultants also found that there was a tendency to concentrate on the retention of isolated historical features and facades. They were of the view that there is a need to evaluate the total spatial, social and historical context of each building in a streetscape. That is why the guidelines on the 1998 urban renewal scheme which issued to local authorities specifically addressed the issue of conservation and set out a basis on which the problems highlighted by the consultants' report might be addressed, while taking account of best practice in terms of both building and streetscape conservation.

The consultants' report also noted that, in the absence of a strategic policy on conservation at national level, it was not surprising that there have been mixed results from conservation initiatives in designated areas. However, since the time that report was published, the Government has made significant progress on the overall issue of building conservation, particularly with the publication last month by my colleagues, the Minister for the Environment and Local Government, Deputy Dempsey, and the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera, of the Government's proposals, entitled Protecting Our Architectural Heritage. These proposals will deliver on a commitment in An Action Programme for the Millennium by putting in place three significant measures.

The first of these consists of a proposed new planning Bill which will transform the legislative protection afforded to architectural heritage. The Minister for Arts, Heritage, Gaeltacht and the Islands will also bring forward a Bill to place the National Inventory of Architectural Heritage on a statutory basis. The inventory will act as a crucial database in identifying buildings throughout the State which are worthy of protection. Second, I am pleased that the Government has given approval for a new budget line of £5 million per annum from 1999 onwards to ensure that the package of measures can be fully implemented. Approximately £4 million of this will be available for grant aid for protected buildings. The remainder will go on the third measure, employment of the necessary conservation expertise to ensure that all buildings worthy of listing are identified, the legislation enforced and the grant scheme operated effectively. The employment of adequate expertise and knowledge by local authorities will be specifically supported with central guidance and support as necessary.

The new conservation measures being introduced by the Government will closely complement and help to underpin the approach to conservation required under the integrated area planned approach to urban renewal. There is strong emphasis in the guidelines for integrated area plans on preference for refurbishment of existing buildings for sustainable uses over new buildings. Plans are expected to show how incentives can be used to support investment in conservation and repair and adaptation to new use.

This Bill is directly linked with the provisions for tax reliefs for the new urban renewal scheme included in this year's Finance Act. The application of those reliefs is subject to the passing by the Oireachtas of an Act providing for the renewal of certain urban areas and the submission of integrated area plans in respect of areas identified on the basis of criteria drawn up by the Minister for the Environment and Local Government.

The Bill is divided into four parts. Part I is made up of mainly technical provisions dealing with matters such as the Bill's commencement and definition of terms used in the Bill. Part II deals with integrated area plans, including the functions of local bodies and the Minister in relation to these plans, and also with rates remissions. Part III clarifies and extends certain additional functions to the Dublin Docklands Development Authority, which was established under the provisions of the Dublin Docklands Development Authority Act, 1997. The opportunity is taken in Part IV to make specific statutory provision for the urban and village renewal grants which are being made to local authorities and certain other conservation bodies under the urban and village renewal sub-programme of the EU co-financed Local Urban and Rural Development Operational Programme. A number of amendments to the Taxes Consolidation Act, 1997, are also provided for in Part IV. While these tax legislation provisions are included in this Bill, the intention is to incorporate the provisions subsequently in the Taxes Consolidation Act via the 1999 Finance Bill.

Sections 1 to 6 deal respectively with the issues of the Bill's short title, various commencement provisions, interpretation of terms used in the Bill, the linking of the Bill with the relevant provisions in the Finance Act, the appointment of authorised companies for the purposes of the Bill's provisions and the payment of any expenses that may be incurred by the Minister in administering the Bill.

Section 7 provides for the drawing up by county councils and county borough corporations or companies authorised by them of integrated area plans, which I might later refer to as IAPs, for a part or parts of their areas for the purposes of the new urban renewal scheme, with provision for the inclusion of part of the area of another county council or corporation, with the consent of the latter. Section 7 also lists objectives which must or may be identified in an IAP. These objectives include the securing of the economic and social renewal of the area and its physical renewal with provision for addressing the various issues relevant to the renewal of the area. The section also requires consultation with a wide cross-section of interests in the preparation of lAPs.

Section 8 provides that lAPs may contain or be accompanied by recommendations from local authorities or authorised companies that parts of the area to which a plan relates should qualify for tax incentives or alternatively that the whole of the area to which a plan relates may qualify for certain of the residential incentives in certain circumstances. The provision allowing residential incentives to be applied throughout an area to which an IAP relates, where this can be justified, has been framed to take account of the recommendations in the Bacon Report on House Prices by confining this option to conversion or refurbishment of existing property in the case of section 23 type relief for rented residential accommodation and to residential property for owner-occupation. Section 23 type relief for new rented accommodation could only be applied in sub-areas within an IAP area where this can be justified.

Section 8 of the Bill provides that in recommending the application of incentives a local authority or authorised company must have regard to the following criteria: consistency between the types of development for which urban renewal reliefs are to be provided and relevant provisions of an integrated area plan; the significance of the reliefs to be provided in a qualifying area for the overall development objectives of such a plan; market conditions in the area covered by the plan; and the nature and extent of any impediments to the development of the type envisaged in the area in which the tax reliefs will apply.

Section 9 provides for the Minister for the Environment and Local Government, having considered an IAP, to make recommendations to the Minister for Finance that an area or areas within the area covered by an IAP should qualify for urban renewal incentives.

Section 10 allows rating authorities to remit on a sliding scale over ten years the rates leviable on premises constructed or improved over a period to be specified by order of the Minister, within an area covered by an IAP. This provision would allow rating authorities to grant rates remissions on this basis in any urban area covered by an IAP regardless of whether tax reliefs are applied in the particular case.

Section 11 provides that developments qualifying for the tax reliefs must be consistent with the objectives of the relevant IAP, with local authorities providing certificates to this effect.

Section 12 covers the putting in place of arrangements for monitoring and reporting for each year on the implementation of IAPs in cases where areas within the area covered by the plan become qualifying areas for the purposes of tax incentives.

In relation to the Dublin Docklands Development Authority, section 13 provides, for the avoidance of doubt, in response to legal advice given to the authority, that the authority may recommend to the Minister for Finance that one or more of the relevant incentives for the docklands as provided for in the Taxes Consolidation Act, 1997, may be applied to qualifying areas in the docklands area.

Section 14 provides that qualifying developments in the docklands must be consistent with the master plan for that area and that this must be certified by the docklands authority.

Provision has been made in section 15 to allow minor variations to the Dublin docklands master plan by the council of the Docklands Authority to take account of any changed circumstances that may have arisen since the adoption of the plan without the need to invoke the full review procedure in relation to the master plan provided for in the Dublin Docklands Development Authority Act, 1997.

Section 16 increases the present limit on borrowing by the authority from £50 million to £100 million to support the major investment to be undertaken by the authority in implementing the master plan. Section 17 makes specific statutory provision for the grants payable under the urban and village renewal sub-programme of the local urban and rural development operational programme.

Sections 18, 19 and 20 contain the provisions which will be incorporated in the Taxes Consolidation Act, 1997, at a later stage. Section 18 will have the effect that double rent allowances for lessees of buildings can apply irrespective of whether capital allowances were granted on a building. This is in line with the taxation provisions in relation to the new scheme under which the intention is that the Minister for Finance may direct that areas within the boundaries of an IAP shall be a qualifying area for the purposes of any one or more of the urban renewal tax incentives.

There have been ongoing consultations with the European Commission on the applicability, in the context of EU rules on State aids, of the various tax incentives for the new urban renewal scheme, the pilot rural renewal scheme for the upper Shannon area and for those in the Custom House area in so far as these schemes are of benefit to commercial and industrial development. I want to give the House some background information on the circumstances which have led to this. In May 1997 the European Commission wrote to the Irish authorities about the enterprise areas tax incentive scheme. The reason for its writing was the extension of the enterprise area scheme in the 1997 Finance Act to the regional airports and the press publicity generated by that decision. After lengthy discussions and examination, the Commission approved the enterprise areas designated in the 1997 Finance Act last December but retained the right to examine each airport enterprise zone designation on a case by case basis as they arose. As a result of these developments it has become necessary to obtain EU Commission approval for the new urban renewal scheme and the new rural renewal scheme, both of which will have to be notified to it.

The Commission is also examining a proposal regarding the extension of the capital allowances for buildings in the extended Custom House area beyond January 1999. Apart from some transitional cases, it will also be necessary to notify the European Commission about the tax reliefs in the wider Dublin docklands area; EU Commission approval is not necessary in the case of tax reliefs for residential accommodation. However, a problem has recently emerged in regard to the continued availability of the double rent relief for tenants of buildings in all tax designated areas in the context of the new European Union regional aid guidelines which are to come into force.

The Commission officials consider that this relief is not compatible with the new guidelines in the context of Ireland's improved economic position and, therefore, should not be granted, except in limited cases. The EU Commission's objections are not expected to arise in the case of the capital allowances for commercial and industrial development but these will be subject to the aid intensity ceilings, arising in 1999, under the new regional aid guidelines. There are still many issues which have to be resolved between ourselves and the EU Commission before the full picture with regard to the future availability of the various allowances becomes clear.

With a view to assisting in obtaining EU approval for the new urban and rural renewal schemes, certain changes in the existing taxation provisions relating to these schemes are provided for in section 19. The effect of the provisions contained in the section is as follows. In the area covered by the rural renewal scheme, double rent allowances for lessees of buildings will apply only for activities specified in regulations to be issued by the Minister for Finance setting out the circumstances in which those allowances would comply with the Commission's rules on State aids. In the new rural renewal scheme where double rent relief continues to be available, 50 per cent capital allowances will apply as heretofore to commercial buildings, but where double rent relief is no longer available 100 per cent capital allowances will apply. In the new urban renewal scheme, 50 per cent or 100 per cent capital allowances may apply for commercial buildings but 100 per cent capital allowances will not apply where double rent relief is also available.

The selective incentive specific designation process which is part of the urban renewal scheme will be operated in a way which ensures that the incentives for this scheme are applied in a way which complies with EU requirements.

Arising from delays in obtaining EU approval to an extension of the current deadline for the incentives in the Custom House Docks area and the EU objections to certain aspects of the incentives as they have applied to development in that area up to now, including double rent allowances in particular, it has become necessary to modify current legislative provisions relating to the incentives in that area. The proposed modifications are provided for in section 20. Specifically, section 20 extends, from l May 1998 to 1 August 1998, the deadline in section 409A of the Taxes Consolidation Act, 1997, by which a contract for the development of a building in the Custom House Docks area must be entered into if it is not to be affected by the £25,000 ceiling which has been placed on the amount of capital allowances which a passive individual investor can offset against non-rental income in any given year.

Section 20 also provides for the following variations as between particular termination dates for the different tax reliefs in the area: 24 January 1999 for double rent allowances; 31 December 1999 for the residential reliefs; and also 31 December 1999 for the capital allowances for the construction of commercial buildings. However, where at least 51 per cent of the qualifying expenditure is incurred before 1 January 2000, the capital allowances qualifying period will be extended to 30 June 2000. These changes will come into effect by way of an order to be made by the Minister for Finance.

In conclusion, may I say that the process of selecting areas and preparing lAPs has been ongoing since last year. The total number of lAPs received by my Department was 78 — well beyond the 50 or so we anticipated. Given that the urban renewal scheme applies in 35 urban centres at present and in view of the well signalled intention that the new scheme will be targeted at the areas where needs are greatest, it is clear that there will have to be limitations on the extent to which designation can be applied under the new scheme. Widespread and extensive designation would defeat the whole purpose of the new scheme. However, until such time as all the lAPs have been fully assessed by the expert advisory panel and recommendations made to me, no decisions will be announced. This process is continuing with a view to ensuring that decisions on designations can be announced as soon as the new scheme can be commenced, following the completion of the continuing negotiations with the EU. At this stage there is no possibility of a decision being made now by 1 August 1998. It is more likely to be late September or early October and that is assuming the European Commission does not make further objections.

I commend the Bill to the House and look forward to a constructive debate on its provisions.

Mr. J. Doyle

The main purpose of this Bill is to provide a legislative framework for the new urban renewal schemes being prepared by county councils and by county boroughs in an effort to provide urban renewal reliefs to these areas.

The urban renewal schemes were first introduced in 1986 as a result of the passing of the Urban Renewal Act. This provided for the designation of certain areas where tax incentives would be available for the redevelopment of such areas. This measure was badly needed at the time because there were many areas in the country, especially in our large cities, where large tracts of land in the middle of city areas were lying derelict. This was particularly true of Dublin. I remember as a member of the planning and development committee, that, prior to 1985, we had received very few applications for development in the inner city. If development was taking place at that time — and there was very little development taking place in the mid-1980s — it was taking place in green fields. It would also have to be remembered that in the mid-1980s we were in the middle of an economic recession, the building trade was at its lowest ebb and there was a strong case to be made for the introduction of a scheme to promote investment in our cities and towns. Tax measures and other financial incentives in the Urban Renewal Act gave that incentive to developers and the redevelopment of our inner cities and towns commenced.

In Dublin many schemes were initiated which provided for the rejuvenation of the centre of the city; the quays were rebuilt and many other areas of the city which were lying derelict benefited from the development which was taking place. I have in mind the Custom House Docks and the Temple Bar areas of the city.

Up to 1985 the only developer providing accommodation in the inner city of Dublin was Dublin Corporation with the provision of local authority housing, and it was essential for a living city that we have a mix of social and private housing. Many of the residential apartments that were built as a result of the tax incentives did bring a balance of public and private housing into the inner city. I think one of the weaknesses of the redevelopments which have taken place is that the residents by locking themselves away in their apartments seem to exclude themselves from the rest of the community. I hope in time that the new residents of these apartments will play their part in the community in which they reside. In hindsight — hindsight is a great gift and I will refer to it later — we should have insisted that a certain proportion of apartments being built at that time, perhaps 10 to 20 per cent, should have been made available as social or affordable housing.

It was right that this scheme, after running for more than ten years, should have been reassessed and the then Minister for the Environment commissioned KPMG & Associates to study the urban renewal scheme. This study is the basis for the legislation before the House today. Indeed, the study itself was critical in many ways of the urban renewal scheme. While the urban renewal scheme had many benefits for our cities, as I have outlined, nevertheless there was a cost involved and I believe if the study does anything at all it brings to our attention the cost to the taxpayer of the urban renewal scheme in the ten year period between 1986 and 1995. Almost £2 billion was invested in designated areas and £500 million was invested in the Dublin area.

It must be said, and said often, that this had a positive effect in terms of residential and commercial development. Without this incentive, even though the economic climate had improved, the developments we have today would not be in place. It must also be said that the investors, developers and new residents have benefited exclusively from this scheme, sometimes at the expense of poorer communities in disadvantaged areas. The consultants were quite clear on this issue when they stated that urban renewal must address the physical, economic, social and environmental regeneration of urban areas, having regard to the local situation, the overall situation and any individual conditions. As such the diversity of issues that urban renewal must address has led to the conclusion that in future measures on a programme for renewal must be linked to area-based integration of strategic planning.

In a city like Dublin, where £500 million has already been invested under the urban renewal schemes, there are still large areas of social exclusion and deprivation. Of the 11 disadvantaged areas formally identified by the Drug Task Force nationally, ten are in the Dublin region with seven in the Dublin Corporation area and the remaining three areas in South Dublin County Council. The impacts of social exclusion are many. They generate a sense of hopelessness; it continues the cycle of unemployment and can be a major cause for crime, vandalism and drug abuse.

Recently I attended a function where the Taoiseach launched a programme for the protection of children in a run down area of Dublin. I do not wish to name the area because it will only stigmatise that area further. I was horrified to see the social exclusion and deprivation that still exists. It is very important that local authorities in the greater Dublin area prepare plans to address specific geographical areas of exclusion and urban renewal within their remit. Integrated area plans have been prepared by South County Dublin for Tallaght and Clondalkin, Fingal County Council for Blanchardstown and Balbriggan and Dún Laoghaire/Rathdown County Council for Dún Laoghaire town centre. Dublin Corporation has prepared five integrated plans to cover the HARP area, Kilmainham/lnchicore, O'Connell Street, the north inner city and the Liberties/Coombe area. There is no doubt that the implementation of the integration area plans will act as the engines for the comprehensive development of localities which, without such focused strategies, are destined to experience further social, economic and physical decline. I am of the view that the implementation of integrated area plans should be a reserved function.

I would like to say a few words about one of these integrated area plans, the HARP, which mean the historic area rejuvenation project. The north west sector of Dublin's inner city is an extensive area which supports a growing population. It is an area with distinctive architectural and civic design character, strategically located in the heart of and abutting the city centre. It is a short walk from the thriving retail and cultural centres of Grafton Street and Temple Bar. The area is clearly defined by and is separated from the remainder of the city by O'Connell Street to the east, the River Liffey to the south, Collins Barracks — now the new National Museum — to the west and the old Richmond Hospital buildings to the north.

In spite of the area's strategic location, the north west inner city has suffered from a significant decline in its economic and social fortunes since the end of the 19th century. This is reflected in extensive physical decay and dereliction, a run-down physical environment and significant areas of social and economic deprivation.

Dublin Corporation for some time has recognised both the area's strategic importance within the inner city and the urgent need to reintegrate this area into the physical, social and economic mainstream of the city's life by designating the core of the area as the Smithfield Rejuvenation Area in the 1991 Dublin City Development Plan, with the objective of seeking its rehabilitation and renewal. The adoption of the HARP plan as an integrated area plan will consolidate the programme of physical regeneration undertaken as part of the HARP framework allowing private investors to take advantage of the rehabilitation of the physical environment and the consequent changes in the perception of the area.

It could be said that the HARP integrated plan was before its time. It was probably the first plan of its type to adopt an integrated approach and its finalisation pre-dated the present legislation. Nevertheless, the integrated approach is similar to the proposed integrated approach outlined in the guidelines in this Bill. It provides a scheme of tax designation of selected sub-areas and developments to provide the necessary linkage to ensure that the social and economic objectives — jobs, enterprise floor space and community facilities — are targetted so as to be of actual benefit to the local community.

With the expected ending of the URBAN community initiative at EU level, it is imperative that the specific measures supported are continued and strengthened with funding from the Government so that the development programmes and the unquestioned success which the pilot programmes have achieved are not "once off" or "short lived" initiatives.

I welcome the proposals which the Governments made in An Action Programme for the Millennium. The proposed introduction of a new planning Bill which will transform the legislative protection afforded to our architectural heritage is very welcome. At present, I am a member of a group known as "The Historic Heart of Dublin" which is an EU funded group carrying out an inventory of buildings in the city which will act as a crucial data base in identifying buildings which are worthy of protection. I am also pleased to note that the Government is making funding available for the conservation of historic buildings. Each year Dublin Corporation in its estimates provides more than £120,000 for the conservation of buildings in Dublin but, as chairman of the planning and development committee, I am saddened each year by the number of very genuine applications to which no assistance can be given.

I understand that more than 80 integrated area plans have been received by the Government from local authorities and I further understand that only about 50 of these will be successful. This Bill includes no mechanism for the selection of these areas. The Minister might, in his reply, indicate the mechanism that will be used to select the successful plans. I hope the areas of greatest need will be given priority by the Ministers for Finance and the Environment and Local Government.

The Bill also deals with the Dublin Docklands Authority and its functions. I am pleased that the new conference centre has been recommended by the Government for the docklands area. This will be the flagship of the area and I hope it will be approved by Cabinet if it has not been already. I am a member of the Council of the Docklands Authority. The general duty of the authority is to secure the social and economic regeneration of the Dublin docklands area on a sustainable basis and to improve the physical environment of the area. The authority has prepared an excellent master plan for the area. This plan envisages that over the next ten to 15 years 11,000 new apartments and homes will be built in the area and that 20 per cent of these dwellings will be affordable and social housing, primarily, for people from the docklands.

The master plan, under Incentives for Development, section 9.3.1, states that tax incentives will be necessary to promote sustainable development of the docklands area because there are certain parts of the area where development will not take place without incentives. Furthermore, a special package of tax incentives to apply to the Dublin docklands area were provided in the Finance Act, 1997, including housing incentives for new construction and refurbishment of existing dwellings. The most sustainable of all developments in the Dublin docklands area will be the provision of new and refurbished dwellings for local people. This is one of the main aims of the master plan where it is proposed that more than 2,000 dwelling units will be for local people.

Hindsight is a great thing but if in 1986, when the original urban renewal schemes were introduced, a condition was attached to the housing incentives that these incentives were only to be given to developers if they provided 20 per cent social and affordable housing in their developments, the housing crisis we have today might never have happened. We should learn from our mistakes and I am glad to say that the Dublin Docklands Authority has shown the way with its master plan. I hope the Department of the Environment and Local Government will look carefully at any recommendations the Dublin Docklands Development Authority might make in regard to the application of the housing incentives provided for in the 1997 Finance Act. While it is a fact that new apartments are being built in the Dublin docklands area without incentives, these apartments are of little benefit to the local people who cannot afford to pay the prices being asked.

The Dublin Docklands Authority is currently preparing its policy on the provision of affordable housing for the docklands and I am sure this policy will be more effective if there are tax incentives to encourage the private sector to deliver part of the 20 per cent social and affordable housing initiative. As a member of the Dublin Docklands Authority Council, I will be urging the authority to make the appropriate recommendations in this regard and I urge the Ministers for Finance and the Environment and Local Government, when reviewing any such recommendations made under section 13 of this Bill when enacted, to take into account the importance of social and affordable housing for sustainable development in the Dublin docklands area.

I was concerned to hear the Minister say that a problem has emerged concerning the continued availability of double rent relief for tenants in designated areas, that the EU Commission is of the view that this is not compatible with the guidelines in view of Ireland's improved economic position and that it should not be granted except in limited circumstances. While we have benefitted from EU funding, there are still areas of huge social exclusion and deprivation in our major cities. This should be brought to the attention of the Commission.

I am also concerned at the delay in some provisions of the Dublin Docklands Development Authority Act, 1997. Can the Minister clarify if section 20 of the Bill will modify the provisions in the Finance Act, 1997, to provide incentives for development in the docklands area? If that is the case it is a matter of grave concern to me. The development of the docklands area provides one of the great hopes for social and affordable housing in Dublin. It is the only area left for further development in the city. If we are to provide 20 per cent social and affordable housing we must encourage private developers to develop the other 80 per cent at whatever price they wish. The EU Commission should be encouraged to move along those lines. That is the remaining hope for the Dublin housing problem.

Mr. Walsh

I welcome the Minister for what is becoming his regular weekly visit. I particularly welcome him on this occasion to introduce this important Bill. The Bill provides the framework for the new urban renewal scheme to which we all look forward with some anticipation. I specifically welcome the inclusion of the integrated area plans which will tackle the socio-economic issues as well as the physical renewal of urban areas.

The scheme has been in operation since 1986 and it has had a positive impact on many towns and cities. It has addressed urban blight and large scale dereliction in many places. The new scheme will take account of the social dimension and will include community development, education, training, employment and local economic development. The scheme has attracted investment into urban development which would not have occurred without the incentives.

Increasing urbanisation is and will be a challenge as more people move to live in towns and there will be a consequent degree of deprivation and marginalisation. The integrated area plans and the urban renewal schemes will be important elements in tackling this.

The Minister of State alluded to the KPMG study on the scheme. The Exchequer has invested approximately £400 million in the scheme in terms of revenue foregone and it is appropriate to analyse the benefits of the scheme. In general the scheme was favourably considered by KPMG, although there were criticisms and it is important to note them. One related to architectural and conservation measures. Perhaps the quality of the architecture being produced is not as good as we would like and the three year or five year deadlines imposed may give rise to some difficulty in that regard.

The IAP may have advanced plans to a greater degree than heretofore, but people have tended to wait to see whether areas are to be designated before drafting plans. The time constraints sometimes lead to inadequate attention being given to design. Planning considerations also impose deadlines and a refusal may put the attainment of the benefit of a scheme in jeopardy. It is an issue that should be considered, perhaps with a view to extending the time limit.

The incentives in the scheme have related mainly to new buildings. There are many listed buildings of architectural or historic significance the cost of refurbishment of which may be prohibitive. Provision might be made in the scheme for the refurbishment of listed buildings, wherever they may be. It would give an incentive to refurbish and preserve these buildings for the future.

An aspect of the Bill and of many of the integrated area plans which have been prepared has been the designation of certain streets to promote "living over the shop" as it is called. As towns have become more prosperous many shopkeepers have moved to the outskirts and, consequently, town centres have suffered. Hopefully, the provisions in the Bill will encourage renewal in town centre living.

Projected demographic changes will lead to an increased demand for housing and rented accommodation in particular may play a more significant role in housing stock than has been the case to date. The unoccupied accommodation over shops is a resource which could be harnessed and would provide the dual benefit of providing accommodation for those who need it and regenerating the town centres.

Due to the escalation in house prices and on foot of the Bacon report the Government has introduced certain restrictions on incentives for investors in the residential letting sector. It is important that under the urban renewal scheme section 23 relief should be operated on a focused basis. Capital allowances and, hopefully, the deductibility of interest will be part and parcel of that. It is important to give some benefit to owner occupiers, but it is also important to have a balance between owner occupation and rented occupation. Some housing developments have been purchased exclusively by investors, but this does not provide the best foundation to underwrite the future value of the developments. There is a need for balance.

In some towns, particularly those with populations of fewer than 10,000, it may be difficult to secure the necessary numbers of local owner occupiers to underwrite developments without allowing a certain component of investors. The section 23 incentives will be critical in this regard. It may be ideal to strike a percentage balance between owner occupiers and investors, although I do not know whether the Minister of State could prescribe that. However, it may succeed in getting a balance to ensure the success of schemes.

Enniscorthy, County Wexford, was only recently designated and the scheme is reaching completion there. Many apartments have been built and many of them have been purchased by investors. The developments have improved the streetscapes and the economic outlook for the town. New hotels, swimming pools and offices have been built. The investment of over £16 million in the town has transformed it. Many towns in the south-east have benefited greatly from similar investments.

As part of the scheme there should be an emphasis on grants for urban authorities. In some cases where private funds have been invested the planning and resources have not been available to provide the necessary upgrading of footpaths, roads, lighting and amenity spaces. These elements contribute to the investments and should be part of the urban renewal scheme. The Bill makes provision for such grants.

When this Bill was discussed in the Dáil, Members took the opportunity to mention their local areas. It would be remiss of me if I did not remind the Minister — although he does not need reminding as the chairman of the council has contacted him on the matter — that New Ross has been put forward for urban renewal designation by Wexford County Council. We missed out on designation in the past, much to our disappointment. Given the competition from Waterford and Wexford, it is important that towns such as New Ross can avail of the benefits of this scheme.

New Ross is the first town tourists come through after the major europort of Rosslare. First impressions are important. We hope the scheme will be extended to New Ross. The River Barrow has been an important focus of the integrated area plan, particularly the tourist project at Dunbrody which involves the reconstruction of an emigrant ship that is being built in New Ross. This will be launched later in the year and will be one of the central themes of the IAP.

I wish to compare the urban renewal scheme with the seaside resorts scheme which has given more generous incentives to developers and investors. As part of the scheme, 1,200 to 1,500 units will be built in Courtown, County Wexford and the investment will range from £70 million to £100 million. This type of investment in accommodation without commensurate investment in the service industries such as restaurants, bars, golf courses, tennis courts and other entertainment, could mean the people staying in these units would have nowhere to go and nothing to do. This may ultimately lead to no lettings and areas of dereliction. Perhaps the Minister will consider extending the integrated area plan process to the seaside resort scheme. Without an integrated approach the scheme may not be as effective as we would like.

Part I of the Bill covers the general standing provisions. Part II relates to the preparation and content of the integrated area plan which sets out objectives for social inclusion and physical renewal. Part III relates to the extension of functions and powers to the Dublin Docklands Development Authority. As Senator Doyle said, the provision of a conference centre in that area will be a significant enhancement of the development.

At a time when many commentators are critical of politicians for various reasons, it is important that we recognise the magnificence of this initiative. The IFSC is a credit to those who had the vision to drive it forward and the area has been revitalised as a result. When one looks at Temple Bar, one sees how the capital is becoming one of the more attractive cities in Europe. This is a credit to all concerned. Part IV of the Bill deals with miscellaneous provisions and covers grants to local authorities for urban and village renewal and the conservation of buildings of architectural or historical significance.

I compliment the Minister on introducing the Bill which will enhance the already significant contribution the scheme has made to many of our urban areas.

Mr. Quinn

I welcome the thrust of the Bill which encourages the integrated development of urban areas. I am shy about speaking after the contributions of two experts on local government, Senator Doyle and Senator Walsh. My experience is different to theirs so I hope my contribution will be useful.

We have all been startled by the remarkable success of the incentive schemes of designation which have dramatically changed the face of many of our provincial towns and cities. Sometimes tax incentives do not achieve their intended effect and when they do the results are not very visible. This is not the case in this instance. However, the development so far has not been balanced, which is why I welcome the thrust of this Bill.

Development so far has been overwhelmingly commercially driven. We have built a great number of offices and shops, although there has been some residential building. However, this has not been successful in creating real communities. As Senator Walsh said, the residential element of development has been almost totally investor driven.

The occupiers of houses and apartments tend to be transient rather than permanent residents. We must aim for balanced development rather than create commercial ghettos which tend to become deserts at night. We should aim for urban renewal rather than urban replacement. It is great to see former derelict areas throbbing with commercial life. However, this is not the vital urban environment where people live, work and shop. Each activity complements the other.

There is a practical difficulty in making integrated development happen. This Bill recognises this problem, but I am not sure it addresses it. When the pressures of commercial and non-commercial development exist side by side, the commercial pressures tend to win out. Integrated local plans are at the heart of this Bill. However, plans are different to what actually gets built. Plans look great on paper but are not a true representation of the reality.

For example, the Custom House Docks development is a major success. The International Financial Services Centre is a massive tax earner for the State and its development is almost complete. However, there is a yawning gap between the original master plan and the actual development. The original plan stressed the concept of "festive" shopping and the development of a dockside entertainment centre which has been a great success elsewhere — for example, in Baltimore, Boston and Capetown. These dockside areas are so successful that they have become tourist attractions. They were previously derelict but are now fun places to be. They have achieved this status for a mixture of reasons. As Senator Walsh said, the conference centre development may help us to move in this direction.

The Custom House Docks development is very different from the plan which was drawn up ten years ago. The IFSC has been successful in some areas but not in others. Despite the original plan, the promoters could not make this festive shopping work in commercial terms. What we have now is not the integrated balanced development originally envisaged, but a cluster of office blocks and very expensive apartments supported by what the occupiers and residents complain is an inadequate level of retail and entertainment facilities in the Customs House Docks area. My point is not to undermine in any way the undoubted success of that project. I am merely trying to underline the fact that it had aspirations to achieve something different — to become a much more integrated development than has proved to be the case.

Plans are not the reality and there is a real danger in an integrated plan that the more commercial elements are built every time, while the less commercial elements are put on the long finger and sometimes end up being dropped altogether; the integration stays on paper and does not actually happen. I do not have an answer to this and neither does the Bill.

There is a need to find some way of monitoring actual performance against the original plans on a continuous basis to see if it is actually happening. That is particularly so for the biggest scheme in the pipeline at the moment, the Dublin Docklands project. It is clearly an exciting project and one that can achieve a great deal. There are great plans for it but can we find a way of monitoring whether it is achieving what it set out to do? There is a danger that the commercial elements will always get built, but the non-commercial aspects will not happen.

There is a fundamental difference between general tax incentives and tax breaks available through designation. I have been an enthusiast for designation because I have seen what it can do. On the one hand, a general tax break is available to everybody who fulfils the conditions attached to it; if one meets the conditions, one qualifies, in other words, the tax break is open to all taxpayers and no person or place is unduly favoured or otherwise.

Tax incentives through designation, however, are based on the principle of deliberately creating inequality of treatment. Many years ago I was involved in a court case that involved the definition of the word "discriminate". The argument was made that in the Constitution "discriminate" means to discriminate against. In fact, the court case ended up being settled on the basis of the Irish language, which takes precedence in the Constitution. It turned out that the word used in the Constitution "idir", which means to differentiate between as opposed to discriminate against. The word "idir" can distinguish between both versions. We can forget that it is possible to discriminate in favour of something.

That is why designation has been so successful. One can favour some places at the expense of others in order to direct activity into chosen areas. We designated inner urban areas because without special treatment no one would have put those areas at the top of their list. With designation these areas were able to jump up everybody's priority list because the arithmetic had changed overnight. It is a powerful way of getting things done.

I have had this experience. My company became involved in urban renewal schemes in Kilkenny, Carlow and Clonmel. They have been very successful and have changed the face of those two towns and one city — I must never make the mistake of referring to Kilkenny as anything but a city. Those schemes, which have been very successful, would not have happened without designation. They are not the only examples of where the scheme has worked so well.

Tax breaks that have inequality built into them should be purely temporary measures. I am not for a moment saying that we should not rely on designation as we have done. There is no doubt that it has brought great benefits to areas which would otherwise have been by-passed altogether or perhaps put on such a long finger and nothing would ever have happened. However, while using designation as a temporary tool we should continually keep in mind that it does create inequality in the tax system and, as such, it undermines the fundamental fairness that should be a cornerstone of any tax system.

I am aware that designation provisions always carry an expiry date in the legislation, and that is right. However, these provisions have so often been extended that it is tempting for us to fall into the trap of thinking they are acceptable on a permanent basis yet, if they are to be fair to the nation as a whole, they are not. I must be careful how I word that point because I am an enthusiast for the use of tax incentives to get things done. It is like using a carrot rather than a stick and it has worked well.

Senator Walsh referred to the seaside resort scheme. It seems to me that when one designates some towns and not others, one is accused of discrimination. We must avoid the slippery slope and keep a clear gulf between what we do on a temporary basis and what we do as a permanent part of our taxation system. Our long term aspiration must be towards a tax code that treats every part of the country on an equal footing. I hope we will be able to reach that position in the foreseeable future.

I want to highlight the extremely dynamic and changing nature of urban development, and I speak about this with a degree of experience. It has changed so rapidly in recent years that those of us involved in business have found ourselves making mistakes by doing things that three or four years ago we thought were correct.

There is a lovely saying that, "If you want things to remain the same, things are going to have to change". If we wish to maintain our cities and towns as we want them we will have to recognise that things change very rapidly indeed. We have all been startled by the extent to which urban renewal has worked. Whole towns and inner cities have been transformed within the past decade and this has changed the way people in and around those areas behave. Shopping and traffic patterns have also changed.

Side by side with this we have had a virtual explosion in car ownership mainly fuelled by the economic growth of the past five years. People have changed their shopping habits and now shop where they did not do so before. Nowadays if people want to buy a newspaper it would not dawn on them to walk to the shops, they drive there. That would not have happened a few years ago. Whether it is laziness or a greater use of cars, we are now using the car more and, overnight that has created a totally new situation in towns up and down the country. Traffic congestion is a part of the daily life in small towns where this would have been unthinkable a few years ago.

It is vital that we keep in step with these changes and acknowledge that urban renewal brings massive changes in its wake. These are changes we must adapt to or we will undermine the new benefits we have created. For example, I think the time has come to make decisions about where we want to locate different types of shopping. I have spoken on this issue to chambers of commerce in Naas, Bray and Waterford. I am declaring a vested interest; we must recognise changing shopping habits.

Years ago, when we came across shopping malls that were being developed in America, we were stunned to discover they had no grocery stores. On this side of the world people questioned how one could build a shopping centre without a grocery store in it. The Americans explained that people make two different kinds of shopping trip.

If one looks at the centre of Dublin, for example, there are almost no grocery stores there any more. Those who come into Grafton Street or Henry Street tend to do it as a different shopping experience than in a shopping centre. There is a difference between essential or convenient shopping on the one hand and comparison shopping on the other. People make two different trips. There is the trip for grocery shopping and the things that go with it, perhaps buying a newspaper and getting something from the chemist or the dry cleaner. I wish it was not the case but many people consider this an essential chore, whereas comparison shopping is an entertaining and pleasant experience.

There has been an assumption that grocery shopping should be retained in the centre of our towns. A number of these towns — Naas and Bray are two examples — have become clogged up by people doing their grocery shopping. Stores offering comparison shopping for dresses, shoes, jewellery, etc., have been affected as a result and they are in danger of losing business to competitors in locations outside these towns.

We can siphon off much of the congestion by locating convenience or essential shopping on the outskirts of towns while maintaining thriving concentrations of comparison shopping in town centres. It is difficult to explain this to people who feel threatened by the transfer of grocery shopping out of town centres. However, it is essential that we do this because towns such as Naas and Bray have become over-congested with people doing their grocery shopping. It is important to recognise that if all shopping is concentrated on town centres we are unlikely to avoid the congestion by which they are threatened.

Towns have matured to a point where the division of shopping between comparison and essential shopping is appropriate and necessary. If we continue to concentrate all shopping in town centres, we run the risk of choking them to death. That would be the ultimate irony, given that we recently succeeded in bringing those towns back from the state of dereliction they had reached.

Those are the three points I wish to make. I accept that the last one is difficult to understand but I will now highlight an example of the difference between essential and comparison shopping. A new shopping centre is being built on the M50 at Liffey Valley, on a site which was originally called Quarryvale. I understand that this major development will include no grocery shopping, with the exception of a Marks and Spencer food hall, because the people responsible for its construction recognise that there are two types of shopping trips. If we do not distinguish between the two types of shopping and put only one in place in our cities and towns, we will congest those cities and towns, choke the environment and lose business to the people who discover a better solution to this problem.

I congratulate the Minister of State on his efforts and I welcome the thrust of the Bill. I wish it every success in what it is attempting to achieve.

Mr. Gibbons

I welcome the Minister of State who is, as Senator Walsh stated, a frequent visitor to the House. I also welcome this important Bill and, while I retain a number of reservations about it, its general thrust is positive.

As a number of speakers indicated, urban renewal has had some very positive effects in recent years and it has rejuvenated many of our towns. We want to see this process continue. For many years our towns were affected by what is termed the "doughnut" effect. This involved the transfer of business to the outskirts of towns which led to the death of town centres. The process of urban renewal which took place in the past eight to ten years has changed this, but I am concerned that it has created a different type of doughnut. The development of the centres of larger towns, which in some cases has been predominantly geared towards accommodation without maintaining a proper balance, has created a situation where smaller towns and villages are dying. I will return to this matter later.

One of the most positive aspects of the Bill is the use of integrated area plans, which will introduce a social dimension to the process of urban development and will try to bring about a balance which was lacking in previous schemes. Senators Quinn and Walsh stated that while these schemes were successful, they did not go far enough and they have not yielded the results originally envisaged. As Senator Quinn indicated, the plans look good on paper and include architectural artistic sketches of people pushing prams and carrying shopping bags. However, it has not worked out that way in reality is some cases.

I am concerned that we may have created minor ghettos of the future in a number of areas because investors bought a large proportion of newly built accommodation with the intention of letting it. I live in Carlow and one of the financial institutions in the town bought a block of apartments and let it out in its entirety. Such behaviour does not generate a sense of community spirit and there is a tendency for this to happen in a town such as Carlow which houses an institute of technology that caters for many students.

I will now return to my main point about the redevelopment of larger towns at the expense of smaller ones. Towns such as Castlecomer, Castledermot, Athenry, Borris, Bagenalstown, with populations of between 1,000 to 2,500, have suffered greatly as a result of developments which took place in the past 25 years. The damage inflicted on them was exacerbated by previous urban renewal schemes. People left these towns to seek work in larger towns and, with the removal of Garda stations, post offices and other facilities, they have begun to die. If we are serious about urban renewal, we should try to retain these towns — not necessarily in their past form — as vibrant units where people can live. There should be greater emphasis on this matter in the new scheme.

The guideline which stipulates that only towns with a population in excess of 6,000 will qualify under the new scheme is ridiculous. I understand why a figure of that magnitude was chosen but it will have serious consequences in the future and it will hasten the rate at which smaller towns are dying. Another scheme could be put in place to cater for these towns; but, if we get the new scheme right, they can be retained. Senator Quinn referred to the congestion caused in our towns by people doing their shopping. We must ensure that our smaller towns and villages remain vibrant and active if for no other reason than to reduce the level of congestion in larger towns.

A criticism of industrial development policy in recent years was that everything was to a great extent focused on Dublin. I welcome the change over the past 12 to 18 months whereby most IDA industrial development is now taking place outside Dublin, because the capital as well as the rural areas will benefit from that. The same is true on a smaller scale and the important towns in this context are the smaller towns within ten to 15 miles of larger centres like Thurles, Mallow or Kilkenny. We need to adjust the population limit. The Minister has explained it is not definitive as regards the urban renewal scheme, but a town with a population of 4,500 or 5,000 might not be deemed big enough. We need to think in terms of smaller towns and village. The current town and village renewal scheme is not working as it should because it is not helping smaller towns. We should integrate these schemes better so that smaller centres do not fall by the wayside.

I agree with Senator Walsh about listed buildings of architectural or historical significance. They should be included in the scheme so that more of them could be retained, because our tourism industry benefits enormously from them. We have lost many fine buildings and if we do not do something to retain the few remaining we will have none.

Mr. Coghlan

I welcome the Minister, who is something of an expert in this matter having piloted the Bill through both Houses. He comes from Galway where the scheme failed to provide a level playing pitch in that a newer area was created within the old scheme which made it more difficult for the traditional shopping area to expand and thrive. That said, in most respects the previous scheme eliminated widespread dereliction in towns where it applied.

The thrust of this Bill is good but it lacks clarity. The process for making decisions on the application of tax relief is woolly in that a definable basis is not laid down. Despite much unevenness, the success of the past scheme has been proven; but legislation on potential tax breaks and rates remissions should be definitive and that is not so here. There is no indication of how widely urban renewal tax relief will apply. In accordance with the process for the preparation of integrated area plans, specified in section 7, the Minister said in the Dáil that 78 such plans had been received — that may have increased since — but how many of these include recommendations for partial or full tax relief and what criteria will be used to decide which will qualify? The point is well made that extensive and widespread designation would defeat the purpose of the scheme, but who will be the final arbiter as to where the line should be drawn? We do not want any more lines in the sand. Undoubtedly, if investor capital is chased by a multiplicity of centres, the impact of the scheme will be lessened.

The core of the Bill is sections 8 to 10, inclusive, dealing with tax and rates provisions, and it is here that the legislation primarily lacks definition and direction. I accept that much dereliction has been removed and, despite a slow start, tremendous efforts were made in many towns. That, combined with and assisted by the strong growth in the economy, brought about many worthwhile improvements. As the Minister said, after ten years it was time to review the scheme and I welcome the KPMG/Murray O'Laoire study and the establishment of an advisory panel to assess the plans and see how well they comply with guidelines. I am also glad that relevant development plan policies and objectives must be taken on board because too often our planners, perhaps because of overwork, have allowed ad hoc developments to creep into schemes. It is not good that a plan is abandoned within a few years of being adopted and that planners have tried to inculcate other ideas in the mind of local authority elected representatives.

Like many speakers I question the lower population limit of 6,000. The Minister said it was not a strict threshold but it was largely accepted as such by local authorities and I imagine he did not receive plans for many towns under that limit. I was delighted to hear of the preparation, by the Royal Institute of Architects in Ireland, in partnership with the Department, of a special technical guidance document on buildings of outstanding architectural and historic importance, including listed buildings, because some unfortunate and frightful mistakes were made in the past.

The key question on this Bill concerns how section 23 relief for new rented accommodation will be decided in sub-areas, where justifiable. Also, how will the balance between commercial and residential areas within IAPs be decided? I agree with Senator Gibbons that in many places where the scheme has operated the heart of the town lacks a community. By their nature, being investor owned, they have tended to have a transient population, made up of people who do not intend to live there in the long-term but stay for the present because the accommodation is available. The new scheme could ensure that people who need to be close to shops, churches etc. — for example, the elderly or those with mobility problems — could be moved closer to town centres.

Section 10 allows local authorities to remit, on a sliding scale over ten years, the rates leviable in an area covered by an IAP. How will this be decided? Perhaps the Minister could indicate the EU Commission's position on State aid to business and their fears about double rent relief and rates remissions, which he mentioned in his Dáil speech.

The Bill provides for local authorities to monitor the progress of plans and to produce written reports to the Minister; but local authorities are not able to monitor the implementation of the Planning Acts and planning permissions because, through no fault of their own, they do not have enough staff. They are inundated with work and stretched to the limit. There has been a huge increase in the volume of applications coming before all planning authorities.

This measure is good in that it is designed to assist cities and towns but we must be careful to ensure that is what it achieves. In this respect I welcome the ministerial directive on superstores and large-scale retail shopping developments, because they could have had a devastating effect on towns and villages and might have set at nought much of the good which was achieved over the past ten years under the previous scheme. I gently take issue with my learned colleague, Senator Quinn, because we have sufficient convenience shopping on approach roads to and on the fringes of our towns — every petrol station now has a shop.

Many towns are clogged and our capital city is the worst example in terms of transport and traffic. Towns need more centrally located off street car parking and link or ring roads and there is no need to wipe out town centres by attacking the outskirts of them. We have a serious duty and I accept it is the Minister of State's desire and that of the Minister to protect the heart and fabric of towns. That was the purpose of the ministerial directive. Too much public and private investment has gone into our towns over the years, not to mention the sweat and blood of the traders therein.

Many areas have thankfully been transformed, but there has been unevenness and some dreadful decisions were made. I am aware of one town where apartment buildings in narrow lane ways were initially allowed to be built four storeys high. The planners then had to rethink and reduced the buildings to three storeys following further applications. The people confined to three storeys probably felt aggrieved because they knew there were four storey buildings beside them. Then, because one neighbour did not like another, an appeal was made to An Bord Pleanála, which decided the buildings should not be higher than two storeys.

I recently visited Enniscorthy and I was struck by how attractive it is and the fact that no damage has been done to it by attacks from the outside. It has good shops in a compact area involving a number of streets and there is a great focus on the river. I agree with Senator Walsh's remarks earlier, and the town has a beautiful scenic river walk. A mistake was made and urban authorities should have had more of a role in the preparation of IAPs. I mean no disrespect to county authorities, but towns should have been consulted more. The county authorities wanted smaller towns, but they felt they would not be able to do that because of the limits imposed. Unfortunately, they may have misread the Minister of State's intention. I wish the Minister of State well with the Bill and I hope it will work very well.

Mr. D. Kiely

I wish to share my time with Senator McGowan.

An Cathaoirleach

Is that agreed? Agreed.

Mr. D. Kiely

I welcome the Minister of State back to the House. He and the Minister for the Environment and Local Government, Deputy Dempsey, have been two of the hardest working Ministers since the Government took power. I compliment them on their work and thank them for the new and important legislation which they have introduced. I am glad the Bill has been introduced and I am pleased with the new and different formats outlined in it. It provides for the urban renewal scheme and one of its key goals will be to nurture and enhance a social dimension to urban renewal. That is the most important aspect of the legislation.

Towns which took part in the urban renewal scheme were very successful. They improved their image, appearance and businesses and this is a success story. Some places advanced more than others because the Celtic tiger has reached certain areas quicker than others. There is a boom in construction and the urban renewal scheme is evident everywhere. However, in my home town of Tralee not one industrial job has been created. This will be an important factor in the future when the scheme is put to bed. There will no jobs to take up the vacuum that will be created by the building of expensive and extensive apartments and houses.

There has been a huge attraction from rural areas into urban areas for this development and rural areas have been seriously affected. I am glad this legislation will cover areas which will not meet the criteria of a population of 6,000. Tralee has the largest population in Kerry, 25,000, and the next largest town is Listowel, which is historic in terms of arts, culture and the literary world. However, it has been deprived of any form of urban renewal. Hopefully, under this Bill it can take part in the scheme with its increased population. People have moved from that area and been attracted to Tralee following its development in terms of shops, supermarkets, etc.

The tourism scheme has worked. I am very parochial as I speak about my county, but Ballybunion was designated under the scheme. Since the scheme was initiated 68 houses have been built there and planning permission has been granted for a number of apartment blocks. That will benefit this seaside resort, which was dying, but I want more to be done. People did not take advantage of the scheme during its first year of operation because they did not realise what was happening. It is only now there is excitement about it as it comes to an end. It will have to be looked at in the future.

I refer to the price of houses, about which I am very concerned. Under this Bill other areas will open up for development and if more land is made available, the price of houses must come down accordingly. The price of land drives up the price of houses and when people take advantage of designated areas, it creates a serious problem. There is a mechanism in the Bill to broaden the umbrella of the scheme to look at towns with populations of 4,500 or 5,000 which have a few villages around them and try to put them under the one umbrella. I will make an application on behalf of Listowel because it is dying. The last two censuses have shown a decrease in population and one must look at that seriously.

Mr. McGowan

I appreciate the opportunity to speak on the Bill. It is one of the most important to come before the House because it offers lifeblood to many small towns. I come from a Border county where there has been major development and major funding has been pumped into towns such as Derry, Strabane and Omagh along the Border. Until recently the difference between the pound and the punt provided a disincentive to the entire business community and they were forced to go from Dublin to Newry. For example, in Derry a multinational set up there, was given a free site and a grant to build. Even if it was over-developed there was no risk attached.

Where a town has received one element of designation, it should not receive another. I am glad the Minister of State said that while the figure of 6,000 people remains as a guideline, he is not tied to it. The second and third biggest towns in a county must be seen to survive. It is very important to encourage people to develop and build up their towns and counties. It is important people start to believe in themselves because the timing is perfect. Some 80 per cent of all funding from the International Fund for Ireland, the Peace and Reconciliation Fund and all American and European funding is pumped across the Border — they do not know what to do with it. I hope that will be reviewed.

In towns which have received urban renewal funding the traffic has been redirected with very restrictive parking, but no consideration has been given to buses and lorries. There are no parking facilities, even in good towns, which is a mistake. The Minister of State should take that into consideration and make some recommendations in that regard. Towns must have a structure and an atmosphere, even after urban renewal, similar to that which one would like in one's own house or hotel. A great deal of craftwork has gone into urban renewal schemes, which I appreciate.

I would not like to see retail multiples selling petrol. The filling station provides a unique service. When one pulls up at a filling station one can get one's tyres tested and so on, which provides people with a livelihood. If the cream of that business is given to large multiples it will destroy that service.

The Bill is very welcome and I wish the Minister of State success with it. He is pumping blood into rural Ireland, which is very important and welcome. I hope he will recognise the towns which have not been recognised so far. Only good can come from this.

Mr. Norris

I also welcome the Bill and the Minister of State. The Bill obviously builds on the success of earlier imaginative work in targeting money at areas of deprivation and urban blight. That work largely focused money on the cities and much of the success has been in Dublin. This Bill will extend those positive provisions towards towns with a population of up to 6,000 throughout the country, in addition to confirming the view that it is important to restore and protect parts of our cities.

One of the stories which has been by and large successful, although I have some difficulties with it, is the development of Temple Bar, and also the Financial Services Centre and docks area. The Minister of State indicated towards the end of his contribution that his commission is examining a proposal regarding the extension of the capital allowances for buildings in the extended Custom House Docks area beyond January 1999. In the light of this practical proposal, will he also examine the situation in regard to Temple Bar? I know there are some difficulties there because the authorities no longer want to direct money towards all the types of development which have taken place in Temple Bar since the quotas for some forms of development have already been well filled.

I must declare an interest in this regard because I was involved in the first development in Temple Bar, which has remained unrecognised. The Hirschfeld Centre at 10 Fownes Street created the atmosphere in Temple Bar in 1978 which brought life into that area before the Temple Bar Authority was heard of. The building was burnt but it is possible it may be redeveloped. Given that that building was the engine which generated the whole success of the area, I would like the Minister of State to consider extending the existing tax incentive scheme to sites and buildings which have a plan or building programme in progress by the end of July 1999.

The integrated plan is a very good idea. However, Parnell Street, particularly the stretch between O'Connell Street and Gardiner Street, has never been properly targeted. I appeal to the Minister of State to include this area for specific incentives, if that has not already been done. That stretch is the worst blight in the north inner city. If the Minister of State goes to look at it he will confirm what I have said. We should make a deliberate effort to do something about that stretch of Parnell Street, which is a disaster.

I read with great interest the Dublin city authorities' plan for a major development of O'Connell Street. Why spoil that by spilling people out into one of the worst areas of urban blight? Recent Governments have not added greatly to the situation by dumping a half way house for female heroin offenders in the old Kennedy's bakery. We have paid our social dues, so let us have some focused and targeted development to improve that area and not spoil the plan for O'Connell Street.

The Minister of State is clearly sensitive to the question of integrating issues such as community development, education and training, to which he referred in his speech. It is absolutely true that deprived areas must be given a feeling of ownership of the new and beautified city. If people who live very close to these areas of renewal are disadvantaged — or not advantaged to the same extent as business interests by the improvement of their environment and surroundings — they will naturally not take an interest in it and vandalism and so on will continue.

How is it possible, in the light of everything that has been said, including statements I have made in this House, that planning permission and licences continue to be given for vast aerodromes which pump alcohol at a high level of intensity into 20 year old kids, who are then flung onto the streets between 2 a.m. and 3 a.m.? Is there not some integrated authority which can oversee this? There are now four of these dens at the top of O'Connell Street. They are a social disaster in terms of tourism and the people who live in the area.

As one of the people who live in that area, I listened with great interest to what Senator Quinn said about the difference between comparison and convenience shopping. We must listen with great care to what he says because he is a very successful businessman with interests in this area. However, since there has been a move of people back to the inner city, it is important that grocery shops, delicatessens and other convenience shops are retained for the people who live in that area. I am not suggesting we should have large supermarkets but that the decent life of the community needs to be sustained in those areas.

I was glad the Minister of State, Senator Quinn and others spoke about the type of investment there should be. It is very dangerous to just develop blocks of single bedroomed apartments behind a facade because that leads to a transient population which does not develop or care for the area. We must aim for a situation of permanent ownership rather than a transient population which is there because of investment interests or people behind the scenes. That will keep life in the area.

We must try to counteract higgledy-piggledy development with a total visual conflict between jarring architectural styles. There must be some degree of sensitivity to the appropriateness of the buildings. I was pleased by the recent launch in North Great George's Street by the Ministers, Deputy Dempsey and Deputy de Valera, of the proposals entitled "Protecting our Architectural Heritage". This is greatly welcomed.

I wish to pay a compliment to the Minister, Deputy de Valera, who I know is not from the Minister of State's party but they are very happily ensconced in Government together. I remember the Minister's grandmother who wrote fairy stories for children and also little plays which we did in our school. Her father was one of the first people to recognise the importance of John Field, one of our great classical composers. I am not surprised the Minister, like the Minister of State, has a passionate interest in the arts.

We need to bridge the gap between vision and reality. Senator Quinn also spoke about this. I draw the Minister of State's attention to an article in Ireland on Sunday of 21 June entitled “£35 m. Duchess lives in basement.” She does not live in the basement next door to me but she owns it. I won a succession of cases against her in court. She has been sentenced to six months in prison and fined £35,000 but she has not met either of those obligations. The house next door to me is falling into the back garden. It is dangerous and a risk. I raised this and the cases of Nos. 5 and 6 North Great Georges Street a number of years ago when the then Minister for the Environment, Pádraig Flynn, was responsible for the Derelict Sites Bill. I was told it would be all right, but it was not. I had to telephone him and get him out of a Government meeting on the day Nos. 5 and 6 were going to be levelled under a dangerous buildings order. We managed to stop that.

However, I suggest the Minister of State look at the question of Nos. 13 and 17 North Great Georges Street because we have the power under various Bills to take those threatened buildings into public ownership and refurbish them. If we are serious this is what we should be doing. I would like to see some action, and also with regard to No. 36 North Great Georges Street.

Indeed, I suggest to the Minister of State that, since we have in North Great Georges Street a community who have rescued the street that was on the point of being flattened, it might be no harm to establish a co-ordinated study of the street to see what remaining problems can be affected by the operation of this kind of legislation. I can guarantee to him that I and my fellow members of the North Great Georges Street Preservation Society will co-operate fully with this endeavour if he decides so to do. I recommend he might take this idea on board.

Reference was made to the International Financial Services Centre, which has been a remarkable success story, except for the fact that the ancillary services — the entertainment and festive shopping that was described at the beginning — has not taken off. We need to look at this.

I welcome the provisions extending these measures to small towns in the countryside. I take a specific and perhaps parochial interest in Parnell Street, which is a crucial element in the building block of the great plan for O'Connell Street, which I welcome. I suggest and offer to the Minister of State that we also target for completion the whole area of North Great Georges Street. By our individual efforts and the work of things like the James Joyce Centre we have almost merited that. I do not say this in a niggling way. We have received support from Government and the local authority. Dublin Corporation has been extraordinarily helpful. The new city manager, Mr. Fitzgerald, has followed in the tradition of Frank Feely in being helpful and approachable and accessible to people. We have also been supported by Irish businesses.

In the light of all this and in the light of the community employment schemes involved in the area, I would like to think that this area would be targeted, and also Parnell Street, which is a disaster. I hope the Minister of State will find it possible to look at that and perhaps to read Ireland on Sunday. There is a case for action, ready made.

Mr. Moylan

I wish to share my time with Senator Cassidy.

An Cathaoirleach

Is that agreed? Agreed.

Mr. Moylan

The Minister of State has been involved in local government and has been a member of many Governments. There is no better Minister to implement these proposed urban renewal policies. He will do an excellent job. He has been carefully listening to the many important points raised by Senators. I know he will take some of them on board.

I welcome the change in the direction and focus of urban renewal policy. The Minister of State has referred to a scheme that will feature a more focused approach, targeting the remaining areas of need. It is important to emphasise the need for an urban renewal policy. It is also important that he has given local authorities the role and responsibility to lead the preparation of the plans submitted.

Although there has been much criticism in the past of local authorities, they are best suited to bring forward these plans. Some have submitted a number of applications and have not prioritised them. Local authorities see the need for spread of development in their county. My own Offaly County Council submitted applications focused on three areas: Tullamore/Clara, Edenderry and Birr. We focused on small areas of need in the hope the Minister of State would accept our submission. In this regard, it would be unfair if a town was excluded from the scheme because of the provision regarding the population figure of 6,000. The populations of towns of that size have always been based on rural areas and smaller villages in a five to ten mile radius.

The designation of sites and areas for tax incentives has been an important measure in the redevelopment and renewal of many of our towns and cities. We have only to look at some of the major towns to see the improvements. The object of the plan was to provide a planned, integrated and focused approach to urban renewal. Some of the submissions include areas of physical dereliction and investment which have been hampered by a poor image. We must try to rectify this in the future.

The bigger cities and towns have benefited in the past from urban renewal schemes. The first schemes, established in the middle 1980s, have resulted in an excellent development in many parts of the country. In any future schemes we must ensure that the architectural features of the developments are maintained and that there is no demolition of old and historic buildings. We must also recognise the number of excellent conservation initiatives in designated areas under previous schemes and ensure nothing happens to listed buildings. They are set out in the county development plans.

I appeal to the Minister of State to include the areas I have outlined from the submission by our county. Clara in the past has been a good industrial town. However, over the past 20 years much of the surrounding area has fallen into disuse. It would benefit greatly from urban renewal, as would Edenderry and Birr, which is a heritage town.

Our county has lost a huge number of jobs, possibly in excess of 2,000, because of the Bord na Móna/ESB situation. Offaly depended on peat extraction and agriculture in the past. Those industries were major sources of employment and economic development. The ongoing rationalisation of these industries has contributed to a significant increase in long-term unemployment. The failure to attract alternative sources of employment has left the county weaker in terms of social and economic development. The expected reduction in employment in Bord na Móna will further exacerbate the weakening of the fabric of society in the county. Unless a major strategic initiative is undertaken with the support of Government, with urban renewal as a focus, there will be serious problems.

If we do not attract industrial and commercial development into the larger towns in the area, the need for residential development will be limited. Some Senators called for balance in urban development. That balance will come about if we attract industrial development — the residential areas will appear. In allowing the smaller towns to develop under the urban renewal scheme, the Minister will be known as the Minister who saved rural Ireland. I hope he will allow us to include the smaller areas in County Offaly. He may not be in a position to do that now but he should give careful consideration to it in the future.

Mr. Cassidy

I join with Senator Moylan in calling for development for Clara and Edenderry. They were towns with high employment throughout the sixties, seventies and eighties but they are now areas in urgent need of investment. I also join with Senator Norris in calling for the development of North Great George's Street. He made an excellent case for the area. Any urban renewal scheme for the area should include Parnell Street. Parnell Square West has been earmarked for development by Dublin Corporation, but Dorset Street and Granby Row should also be included. They were included before but there was lack of investment and the area had a serious drugs problem. Now there is confidence in the area and only incentives are needed.

Something is happening in rural Ireland which has been highlighted by urban renewal. In County Westmeath, Athlone and Mullingar received urban renewal funding and the deprived parts of those towns were transformed. Anyone who played in Cusack Park will remember what a major eyesore Flanagan's Sawmill was in the town of Mullingar. Now it is an uplifting experience to see the new harbour development there.

In north Westmeath there are vacant classrooms, churches in one parish may have to close and there has been a population decline of 30 per cent in Castletown, Finnea and Coole — an area which elected five local authority seats 20 years ago and now may be reduced to three seats.

The proposals in the budget benefited County Roscommon. County Cavan has been granted for special derogation because it is a Border county which will benefit from cross-Border funding as a result of the British-Irish Agreement. The Minister probably has pockets in his own constituency where there has been a massive population decline. A scheme similar to that proposed for the upper Shannon region would provide light at the end of the tunnel. I welcome the Minister for Finance's proposal in the upper Shannon region directive but north Westmeath will find it impossible to attract industry due to the incentives which exist in other areas. I know the Minister cannot include this area in the urban renewal scheme but his officials should come to the area and I will show them the decline there. As Senator Moylan pointed out, the forestry industry is no longer a major employer, Bord na Móna has closed and the orthopaedic hospital in Coole has closed.

I appeal to the Minister to take these points on board when considering which areas will receive money in the next tranche of funding and that our area be highlighted.

Mr. Costello

Although I have some reservations, I welcome the thrust of the Bill.

I support the urban renewal scheme and the initiative taken in the mid-1980s to develop run-down urban areas. In the heart of the city of Dublin there was a doughnut effect where, since the 1950s, there was a declining population. Only in the past few years with the advent of urban renewal has that trend reversed. There has been a tremendous amount of work done to eliminate dereliction and to restore physically areas which were architecturally appalling prior to the initiation of the urban renewal scheme.

In the past the scheme focused on the development of office blocks and residential apartment blocks. The perception was the private market would focus on that area as it would attract development with the various tax incentives available to ensure the scheme would be a success. I understand the direction of the scheme and I do not want to be the first to criticise it in retrospect. It was very beneficial.

I agree with the Minister that there is little point in carrying on with this scheme unless it is changed radically. At present the housing market is booming and there is no need to stoke that boom with further tax incentives. Unless there is a different scheme we should not allow the Exchequer to avail of what would otherwise be revenue for it.

The first failing in the previous scheme, however, was the lack of consultation on the ground. No local community or local councillors were consulted, no form of democracy was consulted in the drawing up of the schemes. While the Custom House Docks Development Authority engaged in ad hoc discussions with community groups, nothing came of them. Temple Bar was set up under separate management without any local interaction. There was also minimum consultation when the heritage area rejuvenation project — the HARP project — was set up in the Smithfield area on the north side of Dublin.

A steering committee was appointed to look post factum at developments taking place in Dublin Corporation and on an ad hoc basis in the private sector and to consider what amenities could be provided with local authority and European money. However, this is not an integrated system and there is a danger that the final development will be hotch potch. A good example of this is the development of North King Street. There is a great opportunity to plan a streetscape for North King Street which has been lying idle for the past 30 years. Dublin Corporation sought to buy up various houses along it so that it could widen it. However, this is only an engineering plan not a housing plan. There is also no connection between the Custom House Docks development along the quays and the development of Sheriff Street. A local authority development on one side is cut off from an urban renewal scheme on the other side.

I am disappointed the Minister for the Environment and Local Government did not take advantage of the good times over the past five years to introduce a social housing policy to cater for the housing needs of local authorities. This would have prevented the current housing crisis. There is a shortage of land because it has been sold off to private developers. We are now introducing such a policy with the Dublin Docklands Development Authority and I hope it will be successful. However, we could have done this five or six years ago.

As this process of urban renewal was taking place over the past ten to 12 years, the country was experiencing its worst drugs crisis. There was no attempt to use the money available to help people in urban renewal areas. There was local neglect of such communities. We were good with bricks and mortar but bad with people. It was questionable at that time if the forces of law and order would be able to gain control because of the ghettos growing up in the midst of plenty. While the situation has improved, there are still major social problems, such as long-term unemployment, poor educational attainment and lack of access to training, which must be addressed. I welcome this belated attempt to introduce integrated area plans.

The report from the consultants, which included KPMG, states:

The delivery of wider economic and social benefits under the scheme in future would require a more focused, integrated strategy. Urban renewal must address the physical, economic, social and environmental regeneration of urban areas having regard to the local situation, the overall situation and any individual conditions.

This legislation is fulfilling that purpose and philosophy. Dublin Corporation has presented five plans, three on the north side and two on the south side, to the Department for approval under the scheme. The three on the north side are the HARP project, the O'Connell Street plan and the north-east inner city plan. It has been agreed that more will be included, including the Ballybough area development plan and the Dorset Street plan, but I do not know if the Minister can consider them. Perhaps he could clarify the number of applications, how many will be selected and what criteria will be used. For the first time wide ranging consultations have taken place between the local authority, councillors and the local communities. They have drawn up the criteria for the plan which I hope will be implemented.

Section 8 provides that tax relief should be granted for rented residential accommodation and residential property for owner occupation. While this is desirable, grant aid must also be given to owner occupiers for home improvements. Only those with capital funding or access to tax relief on such funding benefited in the past. In many cases they dislodged native communities or built around them. People who live in these areas, or whose ancestors lived there, have not benefited from such developments. Incentives should be given to those who live in areas such as Rutland Street or Seán MacDermott Street. Many elderly people on social welfare live in houses or small cottages on these streets which have been handed down through generations and they would benefit enormously from a home improvement scheme. It would be easy to ringfence this scheme so that landlords are not included. The price of these small cottages will increase as they are bought by people who have money to develop them. Landlords will benefit from these tax incentives.

We are going to introduce an integrated scheme and we will create an imbalance because we are not prepared to give any money directly to people in private accommodation which is almost the equivalent of social housing. That is a mistake. If the Minister accepts an amendment, it should relate to that area.

Dublin Corporation is looking at the profile of the area. People do not realise that 60 per cent of the houses in that inner city community are local authority houses. One does not find such a profile in many other parts of the country. Therefore, it is important to stimulate the small private housing sector with owner-occupier relief.

Dublin Corporation is going to demolish a number of flat complexes. It will reduce the accommodation provided by flat complexes from 60 per cent to about 40 per cent. There will still be an extremely high density of local authority accommodation in flat complexes but there will be an improvement, and I ask the Minister to further assist in the improvement in the manner which I suggest.

In that context I welcome the fund which will be made available to protect heritage and conservation listed buildings because Dublin Corporation is demolishing four houses in Seán MacDermott Street which should be listed buildings. For the past 15 or 16 years these buildings have been in the possession of Dublin Corporation, which allowed them to fall into rack and ruin. It prepared a number of development projects which it never implemented and now it is starting from scratch, having demolished them and ruined the side of the street which could easily have been preserved. All of this has been going on and little attention has been paid to it, so I am glad there is an element in the Bill which I hope will do something about that sort of thing.

The second item I want to turn to is the question of education and training, which is an essential element of the Bill. There is a problem about that of course because the local authority draws up the plans. The local authority has no expertise in education or training. It is difficult for the local authority because, although it has planners, engineers and other officers, it does not normally deal with that area. The local authority has not been in the position, as I understand it, to buy in the expertise. Therefore, that side of the developments has been fairly ad hoc. The local authority has been consulted but it has not had the same in-house expertise as it has in other areas.

Much needs to be done. The local authority is trying to look at the pre-school element of it in disadvantaged areas, which is an ad hoc system. I have always believed that if we were ever to implement the Constitution's commitment to State funding of primary education, it should be defined in terms of the first level of education, which would be pre-school rather than primary or national schools. Work must be done on pre-school because it is lacking. There is a high dropout level in primary schools. We are fighting to retain teachers in Breaking the Cycle at present. They are being taken away by the Minister with one hand while he provides different resources with the other. The number of people from the area who go to third level education is small, so there is much work to be done there in enhancing access to third level education and resources.

Adult education is also an issue. Then of course there is the all important interface with training for the jobs, which the local community did not manage to avail of the last time. That is why there is a drugs problem. Nothing happened in the past. All the development took place in a vacuum and there was no spin-off to the local community. Unless we get the integration right and transfer the benefit of the developments to people across the board to improve their social circumstances, education, training and employment prospects, this is not an integrated plan and it will not work.

I ask the Minister to have something done in that respect. An Education Bill is being debated at present. The Minister for Education and Science, Deputy Martin, has ruled out regional boards of education; but we should replace them with local boards of education because there are tiers of education operating in parallel and they never meet. The pre-school never meets the primary level, the primary level never meets the second level, the second level never meets the third level, adult education operates alone and FÁS trains. There is no system or structure for bringing them together. Education is the most disparate of all the services being provided. It is as if each element can operate happily and successfully totally separate from each other. One of our biggest problems will be how to get the education side of these proposals up and running.

The third area I want to address is the management structure. The Bill is silent on the kind of management or implementation structure which will be put in place. We are talking about the parent body, the local authority, but how will the local authority devolve the day to day implementation of it? Who will be responsible? Will the councillors be involved? Will community groups be involved? Will it be left to the manager to draw up a body or will there be no body? Instead, will it be left to the local authority to do it without regulation or structure?

Those are my thoughts on the matter. This is a good Bill. I want to see it improved in a number of areas. I would be pleased if the Minister would take on board the three issues I raised: the provision of funding to owner-occupiers who do not have the means to develop their homes; the need to boost the education and training side of the Bill; and the provision of a streamlined management or implementation structure which would allow the development to take place in a more planned fashion than in previous developments.

Mr. Chambers

I want to share my time with Senator Callanan and Senator O'Brien.

Acting Chairman (Mr. Finneran)

Is that agreed? Agreed.

Mr. Chambers

I welcome the Bill. It is a most important Bill in that it will affect the livelihood and regeneration of many counties. Its implementation needs much direction and management.

I welcome the Minister's enthusiasm in bringing forward this Urban Renewal Bill which involves a social dimension of urban renewal and the integration of community development, education and training, and investment.

There are lessons to be learned from the examination of the previous urban renewal provision which involved the introduction of ad hoc tax incentives. It is fair to say that in the early stages the initial take up was not huge in some areas because the economy was not ready for it. However, there is evidence that the first rounds of urban renewal have been taken up and that they have played an important part in the development of many town economies, particularly in the bigger urban areas.

There are a couple of lessons to be learned from this. The division between rich and poor will get bigger. Tax incentives for urban renewal will play a major part in directing some of the newly generated wealth to areas where it can have a substantial effect on economic development.

Some tax incentive schemes in the past were badly planned. They caused overheating in local economies and drove the price of property above the reach of young house buyers. Recent Government decisions following the Bacon report attempt to address this problem. It is fair and honest to say that most major building contractors await Government decisions on matters such as this. Substantial profits are to be made from developments in designated areas and their investment decisions are made in the light of area designations. It is important, therefore, that we plan urban renewal schemes very carefully and that decisions regarding the designation of areas are taken in accordance with a long term coherent plan.

Following a recent seminar on the new urban renewal scheme, it appears that a minimum population of 6,000 is an important criterion in designating towns for urban renewal schemes. Some submissions have been made by groups of smaller towns in areas of great socio-economic deprivation. The Minister should consider such submissions. I realise that if the scheme is applied to a very large number of towns there will be very little benefit to any, but it is important that an overall plan of tiered development be drawn up and applied at county level.

I hope the Minister will tell us if he sees the need for another scheme for the renewal of smaller towns and villages, or does he regard this Bill as dealing with such places? Do the terms of this Bill cover the long term development of smaller communities — perhaps on a group basis — or is new legislation for that purpose needed? Major towns are developing rapidly and this is having a detrimental effect on smaller centres. County councils must draw up county plans on a tiered basis to ensure that economic development is spread equitably. If this is not done our purpose will be defeated. Urban renewal schemes offer a great enticement to developers. The Government now have an opportunity to improve the socio-economic fabric of small rural towns.

An integrated plan for the Knock, Charles-town, Ballyhaunis and Claremorris area has been drawn up. Can the Minister say how such a plan would fit into the scheme contained in the Bill?

I welcome the provision of £4 million for the protection of buildings of historic and architectural importance.

The scheme as outlined in the Bill is based on good planning and development, the need for investment and the maintenance of the socio-economic fabric of our developing society. It will play an important part in the overall development of local economies.

Mr. Callanan

I welcome the Minister and compliment him and his officials on the exhaustive and extensive preparation of this Bill.

I will confine myself to consideration of my own geographic area because, given the limited time at my disposal, I would be unwise to do otherwise. The advantages of the earlier urban renewal schemes were such that we were all envious because they did not extend to rural towns. This scheme allows that to happen. I draw the Minister's attention to the fact that County Cork is an extensive area with three administrative housing and sanitary areas. Because of that, Cork County Council chose to submit a number of towns for designation. I impress on the Minister the need to bring the Celtic tiger to rural towns. In our small towns we have rural impoverishment. I am glad the Minister has focused this scheme on towns of a certain size with specific criteria. The 6,000 population criterion does not include or exclude the general criteria. Bandon — a town to which I am very close — is included with Mallow and Cobh. Bandon has suffered from its proximity to Cork city and, like all towns, suffered impoverishment in the 1980s. The Minister said he would address the problems of smaller towns and villages. I welcome that because our small towns and villages need regeneration. Bandon is a beautiful town with two rivers flowing through it. It has suffered decay over many generations. I hope the Minister will see that Cork is treated fairly.

Mr. O'Brien

I welcome the Minister and congratulate him on a Bill which will bring prosperity to many towns over the coming years. It will provide the framework for a new urban renewal scheme involving the preparation by county councils, county boroughs and corporations of plans for the social and economic renewal of their areas for submission to the Minister for the Environment and Local Government. Town centres were once at the heart of life but over the years, as towns spread outwards, much of the business moved from the town centres leaving them underdeveloped or derelict. It is important that these areas be redeveloped in a planned fashion which will bring business back to them while ensuring the areas' character remains unchanged.

Urban renewal schemes have been a great success, giving incentives to bring business and development to areas. Monaghan town is a prime example of the success of the scheme in attracting new investment and development. The growth and development of Monaghan town in the past few years has been significant due to the urban renewal scheme. Ballybay, Castleblayney and Clones could do with a lift and I hope this new scheme will provide it.

As the economy continues to grow with an increase in job creation, it is timely to put in place this legislation for a new urban renewal scheme to ensure life remains at the heart of our towns.

Minister of State at the Department of the Environment and Local Government (Mr. Molloy)

Tá sé soiléir ón méid atá cloiste agam go bhfuil an-suim ag na Seanadóirí san Bhille seo agus go gcuireann siad fáilte roimhe. Tá áthas orm faoi sin. Tá cuid mhaith ceisteanna curtha agus déanfaidh mé iarracht roinnt acu ar a laghad a fhreagairt san am atá fagtha.

Senator Joe Doyle raised the issue of reserved functions. The proposed framework for the new urban renewal scheme was notified to each county and city manager on 14 May 1997. Within that framework it was indicated that the selection and prioritisation of areas for integrated area plans and the preparation of plans for priority areas were the responsibility of the relevant corporation or county council. Many Senators indicated that I should select towns which may not have been submitted by the local authorities.

This scheme is an exercise in subsidiarity — a bottom up exercise, so to speak. The opportunity was given to the local authorities to develop the IAPs within the clear guidelines given. One cannot understand the Bill fully without reading the guidelines. Many of the questions raised about management and the objectives that might be met are on matters dealt with in the guidelines. I recommend to Senators to read the guidelines. We will examine any proposals made. The advisory committee will make the recommendations, I will examine them and they will go on to the Minister for Finance.

At the time notification was made to the city and county managers in May 1997 no indication was given of an intention to make the selection and prioritisation of areas and the preparation of plans a reserved function. If in the future an opportunity arises to take similar action I agree it should be a reserved function. However, I cannot change that now. The process is under way.

Senators raised the issue of mixed public/private development. I fully agree that it must be at the core of public housing policy. This issue will be important for the new schemes. The guidelines specify that in general 15 per cent of all housing provided in an area covered by an IAP must be social housing. There is continued provision for the issue of guidelines on the size, mix and quality of residential developments. Existing guidelines on such developments have succeeded in improving quality and these will be strengthened if necessary.

Senator Joe Doyle raised questions about section 20. It relates only to developments in the Custom House Docks and does not provide incentives to other dockland areas. Incentives for other areas will be subject to EU approval generally. Reference was made to residential incentives in docklands and we will look carefully at any suggestions from the Dublin Docklands Development Authority in that regard.

Senator Walsh suggested an extension of the time period. Given the cost of the scheme, it is important to get maximum value for money over the shortest possible period. That is the purpose of the three year deadline. The issue of extensions can be considered at appropriate times depending on the circumstances.

Senator Walsh and others raised the issue of listed buildings. It is not possible to separate the listed buildings from the IAPs but new grant measures which I mentioned in my speech will enhance the protection of listed buildings in the future. The issue of "living over the shop" was raised and it can be included by a local authority in the IAP it submits. We intend to look at further ways to support the concept.

Senator Quinn asked about the provisions for monitoring and reporting. The guidelines provide details on those issues. Local authorities will be obliged to certify that qualifying projects are consistent with the IAPs, giving them a considerable measure of influence and ensuring the objectives of the plan are met. They will have a better chance of being delivered because of the need for certification and the monitoring of the implementation of the schemes. Incentives will be applied in the future in support of objectives set out in plans aimed at achieving social and economic benefits in deprived urban areas.

The urban renewal scheme does not seek to locate all shopping facilities in town centres. It seeks to achieve a range of uses at the centre which will help to keep towns alive.

Senator Coghlan referred to section 23 relief for new residential accommodation. This can be applied to the sub-areas within the IAPs when a good case is made. One of the recommendations of the Bacon report was that section 23 relief should be abolished. However, we retained the section 23 relief to have it as an option for use in IAPs in certain circumstances.

Given the current state of the housing market, the scope for section 23 relief for refurbished rented accommodation is likely to be more flexible than for new houses in view of the emphasis on promoting new uses for old buildings. The state of the housing market will be one of the factors with regard to the residential tax incentives for new houses or apartments that are approved. It is taking some time to assess all the IAPs submitted because they must be examined closely. Local circumstances are among the requirements that must be taken into account. The housing market is overheated at present and in many cases it would be wrong to provide tax incentives on top of the existing market demand.

In reply to Senator McGowan, the scheme guidelines indicate that issues such as traffic management need to be addressed. In reply to Senator Costello, local authorities are expected to work in partnership with relevant education and training statutory bodies in pursuing education and training initiatives in the context of the IAPs. He asked from where the expertise will come. It is already there and it is a question of inter-agency co-operation. The guidelines suggest models for a management structure to monitor the implementation of the plans.

Mr. J. Doyle

What about the selection mechanism?

Mr. Molloy

That matter has been well covered. The initial selection of areas to be included in an IAP is the responsibility of local authorities. They will submit their selections to the Department before 31 March. The Department will then submit those to an expert advisory group which will examine whether they comply with the guidelines, whether their objectives are reasonable and what tax allowances should be made available. The group will then make its recommendations to me. I will then make recommendations to the Minister for Finance as regards the granting of tax allowances. He will make the final decision. That is the only reasonable manner of selection. The Minister for Finance is responsible for taxation and budgetary policy. The final decision on the granting of tax concessions cannot be made by anyone other than him. The process is as open and as transparent as it can be within the law.

This is a new approach to the tax designation of areas for development when compared to the arbitrary manner in which it was done in the past. The basis was laid by the previous Government. We have accepted it and moved it forward to this stage. I am satisfied the decision making process is transparent. The Freedom of Information Act means that people will have access to their files and can examine the decisions.

I thank Senators for welcoming the Bill and I look forward to Committee Stage.

Question put and agreed to.

Committee Stage ordered for Tuesday, 30 June 1998.