Seanad Éireann debate -
Tuesday, 20 Sep 2011

Vol. 210 No. 3

Adjournment Matters

Planning Issues

Senator Deirdre Clune

I thank the Cathaoirleach for the opportunity to raise this matter and I am glad the Minister is present to respond. I refer to the issue of development charges and the impact they could have on restricting economic development. The charges have been with us for a while and they have been a significant revenue source for local authorities. A review of the charge was carried out a few years ago when I was a member of Cork City Council. Our approach was to examine future development and what would be needed. We sought to strike a balance between existing development and proposed developments and contributions were made in an open and transparent manner and there was accountability at the time. However, circumstances have changed and these charges still attach as a condition of planning permission. In some cases, the charge is high and it is a disincentive to development.

Cork City Council still has the same charge while Cork and Limerick County Councils have reduced it in an effort to encourage economic development. I received an e-mail drawing my attention to a planning application granted in Cork earlier this month for a scheme on the docklands. The development comprised 61,000 sq. m of office space and 18,000 sq. m of business and technology space. It is a substantial proposal for which the development charge is €31 million but no financial institution will lend money on that basis. The reason I have raised this issue is to ascertain what plans the Minister and the Department have to ensure excessive development charges are reduced to encourage development. There must be a balance. If these developments go ahead, everybody employed in their construction will spend money and benefit the economy. Local authorities and county and city managers must examine the situation because it is not uniform throughout the country. In many cases there is a disincentive towards development.

I hope the Minister can also clarify something else for me. I understand that development contributions have been waived by local authorities for any loans and developments with which NAMA has been associated. Is that true and who decides who should or should not pay?

Minister of State at the Department of the Environment, Community and Local Government (Deputy Willie Penrose)

I thank the Senator for raising this important issue.

The Senator will be well aware that a key objective of the programme for Government is to get people back to work. This is being reflected in policy and programme development across all Departments, agencies and local authorities and will continue as a key priority over the coming years. Local authorities, including in their role as planning authorities, are acutely aware of the contribution they must make to economic recovery, to employment creation and sustainment and in directly influencing investment decisions.

The statutory basis for the operation of the various development contribution schemes is set out in the Planning and Development Acts 2000 to 2010. The process set out under the Acts provides for a considerable degree of transparency in the making of development contribution schemes and a high level of public consultation. It is important to note in that regard development contributions may only be levied in accordance with a development contribution scheme formally drawn up by the planning authority and approved by the elected members following a public consultation process. As well as having responsibility for the statutory planning code, my Department also provides the policy guidance framework for development contributions. This guidance is designed, inter alia, to assist planning authorities to achieve, through their development contribution schemes, a balance between the costs of the services provided and the need to support economic activity. At the same time, the guidance also makes clear that the adoption of development contribution schemes remains a reserved function.

Local authorities have witnessed a steep decline in revenues from these schemes and it is certain that income from development contributions will continue to be adversely impacted in the current economic climate. This reflects wider economic trends. It is important to acknowledge also that a number of local authorities have already responded to the very difficult economic circumstances that currently exist by amending their respective development contribution schemes to reduce the contribution rates, in particular for employment generating projects. For example, Louth County Council has halved its development contribution rates for expansions to authorised industrial and manufacturing operations, IDA or Enterprise Ireland supported manufacturing, international trade and financial services sector and businesses grant aided by the county enterprise board or other recognised local development agencies. The Department is also aware that, in some cases, the payment of development contributions has been phased by local authorities to reflect difficulties at a local level while also supporting economic activity.

The Department is preparing updated guidance for local authorities on the issue of development contributions which will require local authorities, inter alia, to consider the impact of development contributions on businesses and competitiveness generally in the development of their schemes. Authorities whose development contribution schemes have come up for renewal since the announcement of the Government’s jobs initiative have been advised to consider providing reductions or exemptions in development contribution rates where these would help progress the jobs initiative. In particular, planning authorities have been advised to satisfy themselves that due consideration has been given to measures open to them to support new, or existing enterprises in their area by, for example, the deferral of payments, having regard to the overall funding position, contractual commitments entered into and the importance of projects funded through development contributions in supporting local employment.

I am confident that the new guidance will enable authorities to achieve the right balance into the future between generating the revenues required to provide the necessary infrastructure associated with new development and creating the right conditions to support economic activity and renewal. I will follow up on the question raised by Senator Clune on NAMA.

Senator Deirdre Clune

I am glad the Minister of State will follow up on that issue. He mentioned guidance and guidelines but will he inform local authorities directly that these are strict guidelines? The planning application to which I referred was granted earlier this month. The Minister of State has said that guidance was given to local authorities after the jobs initiative, but the local authority did not adhere to those guidelines.

Deputy Willie Penrose

The guidelines were there, but the updated guidance will be issued shortly to the local authority and I hope it will clarify the issues.

Meitheal Forbartha na Gaeltachta

Senator Trevor Ó Clochartaigh

Cuirim fáilte roimh an Aire Stáit. Tá beagán díomá orm nach bhfuil an tAire Ó hÓgáin anseo leis an gceist seo a fhreagairt mar is ceist fíor-thábhachtach í i gcomhthéacs na Gaeltachta agus sílim go bhfuil ceist le freagairt aige.

Táim ag caint faoi Meitheal Forbartha na Gaeltachta, MFG. Go minic nuair a bhíonn jabanna á chailliúint ar fud na tíre, feiceann muid Airí agus Airí Stáit ag léimneach suas agus anuas agus ag déanamh scéil chailleach an uafáis os comhair na ceamaraí teilifíse agus raidíó, ach is beag caint atá déanta faoi MFG. Tá 130 jabanna sna ceantair Ghaeltachta ag imeacht mar gheall ar an teip atá ar an gcomhlacht seo agus tá ceisteanna tromchúiseacha le freagairt faoi sin. Tá sé curtha in iúl go rí-mhinic agam féin agus ag daoine eile go raibh deacrachtaí le Meitheal Forbartha na Gaeltachta le roinnt blianta anuas. Go deimhin, d'ordaigh an t-iar Aire go ndéanfaí cúpla iniúchadh ar an gcomhlacht ó thaobh chleachtais bhainistíochta an bord stiúrtha agus iad ag comhlíonadh a ndualgas, cúrsaí airgeadais agus mar sin de.

Chonaic muid an tseachtain seo caite go bfhuil an comhlacht le scor, go bhfuil na jabanna le himeacht, go bhfuil cuid de na cláir le cur ina áit éiginnte agus nach bhfuil sé soiléir cén todhchaí a bheidh ag an chuid eile. Tá imní orainn ó thaobh na ndaoine atá fostaithe sna comhlachtaí, agus imní orainn freisin i dtaobh na ndaoine ar a bhfuil na cláir seo ag freastal. Le coicís anuas, táim ag iarraidh soiléirithe a fhail ó Phobal, ón Roinn agus ón gcomhlacht féin faoi céard atá ag tarlú. Tá faitíos orm go bhfuil daoine ag dul ar chúl sceiche le cuid den scéal seo.

I will revert to English to make this point. I believe there is significant buck passing happening in the Meitheal Forbartha na Gaeltachta scenario. We have the Department funding programmes through Pobal to the independent company, Meitheal Forbartha na Gaeltachta which operates State-funded programmes. When one asks MFG what is going on, one is told it is a question for Pobal. When one asks Pobal, it says it cannot say anything until it talks to the Department and when one talks to the Department, one is told it is an issue for the independent company, Meitheal Forbartha na Gaeltachta. This is completely unacceptable. There are 130 jobs in the balance but this has not made the media headlines it should have and when I have asked for answers, they have not been forthcoming.

We have been raising serious governance issues about this company for quite a long time. As far back as three years ago, the directors of the company were written to by certain parties warning them of their responsibilities as directors with regard to the governance of the programmes they administer. These are all State sponsored programmes. Three of these programmes were audited approximately a year and a half ago by Pobal, but the report has not been published despite our calls for its publication. I have seen a copy of the report and it raises massive issues regarding the governance of the company. Why did the Department and the Minister not step in sooner? Why has Pobal not acted and why was the board of directors of Meitheal Forbartha na Gaeltachta not held to task before we ended up in a scenario where the company is to close down — I believe there is talk of it being liquidated — and 130 jobs are to go? It is an incredibly serious issue and the people of the Gaeltacht are dismayed and angry that the reaction to the news has been so slow and muted.

Sin í mo cheist agus sin an fáth gur chuir mé an cheist. Cuirfidh mé fáilte roimh an bhfreagra ón Aire Stáit.

Deputy Willie Penrose

The Minister is away on Government business and cannot be here.

Meitheal Forbartha na Gaeltachta Teoranta, MFG, is an independent company with its own board of management and memorandum and articles of association which has responsibility under company law for the proper stewardship of the company. My Department has no role in the internal operations of local development or partnership companies and, therefore, does not have a role in staff matters, which are for the board of the company as the employer, to manage.

Pobal, which manages programmes on behalf of the Department, commenced an audit of MFG in January 2010. The audit findings and associated recommendations were notified to MFG in June 2010. An independent executive, Mazars, was appointed by Pobal to MFG on 30 June 2011 to examine the outstanding audit issues and to identify suitable mechanisms for their resolution. The executive presented its interim findings to Pobal in mid-August 2011 and presented its recommendations and progress to the board of MFG on 7 September 2011. The final status on the recommendations was scheduled to be presented by the independent executive to Pobal by 30 September 2011.

MFG has confirmed that its board, on examination of the company's financial situation, took the decision to cease trading as of 4 p.m. on 7 September 2011 on the basis of insolvency. The board has also confirmed that all staff contracts have been terminated since the board meeting. The Department and Pobal met MFG and the independent executive, Mazars, on 9 September 2011 to establish the facts with regard to the specific decisions taken by the company and on its progress on implementing these decisions. The company was strongly encouraged to avail of financial advice alongside the legal advice, which it was stressed was imperative, and it was encouraged to access the same immediately. It also committed to immediately effect all other necessary work to meet its statutory obligations with regard to staff. It was agreed at that meeting that MFG would take full legal advice on the necessary steps in this process and ensure it fulfils all statutory duties in that respect. The Department and Pobal are awaiting a written update on the implementation of this work. Pobal will continue to offer any appropriate support to aid this work. In parallel, my Department and Pobal are examining mechanisms to support the continuation of services previously supplied by MFG within the Gaeltacht areas. However, it should be noted that MFG is a private limited company and it is beyond the remit of my Department to direct the business of such a company in any way. It is the responsibility of the company's board of directors to fulfil all its obligations under company and employment law. As the Senator will know, the issue of employee rights is the responsibility of the Department of Jobs, Enterprise and Innovation while responsibility for welfare rights rests with the Department of Social Protection.

Senator Trevor Ó Clochartaigh

I understand the Minister of State is saying that he has no right to interfere with an independent company, but the programmes are State programmes that are directed by the Department. Guidelines are laid down for the proper implementation of the Leader programme, the LCD programme, the CSP programme, etc. Does the Minister of State agree that this gives him a right and that the Department should have stepped in sooner? If it had a report in June 2010 that showed up such deficiencies in the company, why did he not act sooner so that, instead of the jobs going, the company could perhaps have been salvaged and the jobs saved?

Deputy Willie Penrose

This is an issue I will follow up in the context of the particular matter the Senator has raised.

The Seanad adjourned at 5.50 p.m. until 10.30 a.m. on Wednesday, 21 September 2011.