Chairman and members, I welcome the opportunity to present my Department's expenditure Estimate for 2010 to the committee. I know committee members are deeply interested in the range of activities pursued by my Department and I look forward very much to our discussions this afternoon.
I am accompanied by the Minister of State, Deputy Ciaran Cuffe who has recently taken on responsibilities relating to the Department. He will also make a brief opening statement on the areas in the Department in which he is involved. Unfortunately, Ministers of State, Deputies Michael Finneran and Áine Brady cannot be with us this afternoon due to the air travel restrictions that have been in place in recent days.
As the committee is aware, the Government has in recent times taken strong action to correct the imbalances in the public finances and these measures are inevitably reflected in the Estimate before us today. We have taken tough decisions and will not shy away from any further such decisions that may be needed to put our finances and the wider economy on a stable foundation for long-term growth.
At the same time as tackling the very difficult public finance position, we are working to maintain, and enhance where possible, essential public services, especially for those in greatest need. The Environment Vote for 2010 amounts to nearly €2.2 billion, a substantial sum by any reckoning or at any time. Backed by these resources, we will intensify further our work to maximise efficiency and to secure optimum value from the money available to us, to deliver the best possible outcomes for our citizens.
The Estimate is complemented by the Department's Annual Output Statement 2010, which details achievement against targets set in the 2009 annual output statement and outlines targets to be achieved with the resources available this year. The committee also has a briefing note which we prepared on the 2010 Estimate as a whole.
I propose, in the time available, to comment on some specific aspects of the Department's Estimate and we can consider others as required in our later general discussion.
Members may be aware that yesterday I launched the Water Services Investment Programme for the period 2010–2012. A sum of €508 million is being provided for investment in water services infrastructure this year. Of this, €415 million is earmarked for local authority water and waste water projects under the water services investment programme, including in the critical area of reducing leakage and conserving our water resources; €93 million is being allocated to the rural water programme, mainly to tackle water quality standards in private group water schemes.
While marginally down on last year's outturn of €512 million, average spending on water services over the period 2009 and 2010 will be up 3% on the 2008 outturn. This continuing high level of expenditure reflects the Government's commitment to protecting our water resources, meeting EU standards for drinking water and waste water treatment and putting critical infrastructure in place to support industrial, commercial and other development. Investment under the programme will also support more than 4,000 jobs in the construction sector this year and many additional jobs in manufacturing, operating and maintaining new infrastructure post completion.
Much has been achieved in recent years in this sector and, with the launch yesterday of the Water Services Investment Programme for the period 2010–2012, we have put in place the platform for continuing progress and success over the next three years. With the finalisation of the first cycle of river basin management plans, the programme aims to prioritise projects that target environmental compliance. It also fully supports economic growth and jobs as envisaged in the Government's policy document, Building Ireland's Smart Economy — A Framework for Sustainable Economic Revival.
The programme details more than 130 contracts and water conservation projects in progress with a value of about €1 billion; some 340 contracts to be progressed to construction over the period 2010–2012 with a value of €1.8 billion; and some 190 schemes and water conservation projects on which planning work will continue.
I have taken the opportunity to make some changes to the format of the programme to bring a new focus and dynamic to providing much-needed infrastructure. This will be achieved primarily by new emphasis on progressing priority contracts within schemes. Contracts that are required to complete those schemes will be completed in due course but not before urgently required contracts elsewhere are finished. This new flexible approach is needed so that we target the environmental and economic priorities that must be met.
I indicated earlier this year that the programme would put a new emphasis on water conservation. The importance of measures to conserve water resources and use them wisely was brought home to us all during the big freeze last January. The programme outlines investment of some €320 million over the next three years on network rehabilitation works. This is more than double the expenditure on water conservation works over the past seven years and I expect this investment to improve considerably our ability to reduce what are very high rates of unaccounted for water.
I have taken the opportunity also to publish in a river basin district format the contracts and schemes to be progressed under the programme. I hope the Deputies opposite have a copy of this document as it shows clearly where the river basin districts are. This clarifies the wider impacts of the investment proposals and shows clearly the response the programme is making to priorities identified in Ireland's first set of river basin management plans prepared under the Water Framework Directive.
In the housing area we have a budget this year of nearly €1.2 billion to spend on a range of measures. This reflects the high importance the Government attaches to the provision of social housing and meeting the needs of homeless people and other vulnerable groups requiring housing support. The Government's strategy in shaping the overall housing Estimate for 2010 has been: (a) to focus necessary adjustments in the areas where there is scope to maintain output through more flexible approaches, and (b) to prioritise the most vulnerable and disadvantaged.
In this regard, the significant transformation of housing programmes under way will continue as the major priority in 2010, with the shift away from new build projects towards initiatives such as leasing. As part of this process, available capital funding will be increasingly targeted at regeneration, special needs housing and improving the environmental performance of the housing stock.
On voluntary housing, the level of funding being provided under the capital assistance scheme this year — up by more than 30% to €145 million — will ensure that we continue to benefit from the capacity and commitment of that sector. In addition, more than €64 million in current expenditure available in 2010 will support borrowing of more than €140 million under the capital loan and subsidy scheme. We will also keep under review the availability of loan finance to approved housing bodies.
Since the launch of the new suite of adaptation grants for older people and people with disabilities in late 2007, the level of demand and activity across all local authorities has been enormous. This is testament to the importance the grants play as part of an overall continuum of care and vital support for independent living at home for the groups at which they are targeted.
I am very pleased, therefore, to be able to say that 2010 will see a further significant increase in funding for the grants, up by 23% to €80 million, giving a total provision of €100 million this year when the local authority contribution is taken into account. It is relevant to note that, of the 11,434 grants paid out last year under the grant schemes, more than 4,200 were for improvements to the fabric of the homes of older people, while nearly 1,300 dealt with mobility problems largely associated with aging.
We have also maintained this year a high level of ambition for local authority regeneration and improvement works in some of the most disadvantaged and neglected areas of the country, aimed at helping to replace failed estates with vibrant, sustainable communities. A new dedicated funding line specifically earmarked for retrofitting and other energy efficiency improvements is being introduced: €45 million is being provided for this in 2010. The introduction of a separate funding line specifically for energy efficiency measures also means that the provision of €195 million — an effective increase of €25 million — for "pure" regeneration projects will go even further in areas such as Limerick and Ballymun.
In the case of Limerick in particular, the Government recently reaffirmed its commitment to the vision outlined in the ten-year regeneration programme. The Limerick regeneration agencies have since completed work on a phase 1 implementation plan which they submitted to my Department this month. To help maintain the momentum, the plan is being considered in my Department and I will bring it to the Government in the coming weeks.
Homelessness is the most extreme form of housing disadvantage and addressing it remains a key focus of the Government, the Minister of State, Deputy Finneran, in particular. This will be a critical year in realising the aims set out in the Government's homeless strategy, The Way Home, with its implementation shifting into a new gear. To help deliver on it, funding for homeless accommodation this year will match the 2009 provision of €56 million, but the allocation marks a substantial increase in real terms.
As regards the main local authority housing programme, the committee will be aware that in advance of the need for downward adjustment in financial provision my Department had been putting in place and continues to put in place a programme of reform that is transforming the way in which social housing supports are delivered. The scale of adjustment in the public finances now required may have added further impetus to the process of change we have been driving, but let no one try to claim fiscal expedience is driving the programme of reform.
By the end of 2009 some 2,000 units of accommodation had been sourced through the long-term leasing initiative. This is a very considerable achievement, but it could and perhaps should have been greater. It can and should be considerably greater this year. While many local authorities have been responsive to the shift in emphasis in social housing delivery, others, including, unfortunately, elected members in some cases, seem rooted in a one-dimensional way of doing business. To them I say bluntly: they do not have that luxury. These authorities have a clear choice to make about the role they see for themselves in the delivery of social housing. While the provision for the main capital programme might be down to €366 million and we can expect output from the programme to fall back, I anticipate that the overall provision will allow an output of approximately 9,000 units. A significant proportion of this figure must come from leasing and the rental accommodation scheme. The extension of long-term leasing arrangements to the voluntary and co-operative sector opens up further possibilities for delivery. In overall terms, this part of the Estimate for 2010 provides us with the right balance of resources to continue working towards the system of flexible and graduated supports which are foreseen in the related policy framework and required to meet the varying forms of housing need people experience.
Like every other sector, the local government sector cannot be immune from the fiscal pressures we face. However, we continue to allocate significant levels of funding to local authorities. For example, there are grants and subsidies allocated to local authorities on current account from central government and the local government fund which will be of the order of €2 billion this year. The non-principal private residence charge, introduced in 2009, broadens the revenue base of local authorities by levying a charge on certain domestic dwellings. The intention is to establish new, relatively stable, local sources of funding. The charge represents an important step change in how local government is financed, with the moneys generated retained by the relevant local authority and spent on local services. From the yield so far, some €62 million can be expected by local authorities from this source this year. On this basis, I am confident that local authorities will have the necessary resources to continue to provide essential services for their areas.
Even in these difficult times, local authorities spend some €11 billion annually and it is essential this money is spent in the most effective and efficient way possible. To further this objective, we have established a review group which mirrors the McCarthy group to undertake an independent examination of local authority efficiency. The group is examining the cost base of local authorities to advance a new efficiency drive, achieve greater value for money and contribute to the over-riding national requirement to address the imbalances in the public finances. The group is engaged in wide-ranging consultation and has met stakeholders, including the local elected member associations and the County and City Managers Association. I look forward to receiving its report by mid-year.
This year we will see the beginning of a major series of changes to the local government system. In particular, a new mayor of Dublin will be directly elected this year. The mayor will bring about tangible beneficial changes across the spectrum of local government activity in Dublin, including for the region's competitiveness and overall economic well-being.
This year we will also see publication of a climate change Bill and the national climate change adaptation framework. In the aftermath of the Copenhagen conference in December and the failure to agree new international arrangements on climate change mitigation, this will be another important year, culminating in the United Nations climate change conference in Cancun, Mexico in November. Work towards a new mitigation framework remains a key issue at international level and in the associated processes my Department continues to give priority to leading negotiations for Ireland on future climate change commitments. Calls for financial support for some of the international negotiation processes will be assessed and funded, where appropriate.
The programme for Government agreed in 2007 and the renewed programme for Government agreed last October include a number of objectives relating to waste management, including a commitment to carry out an international review of waste management plans, practices and procedures and act on its conclusions. Last November I published the report of the consultants engaged to carry out a study to underpin the review. My policy in the area of waste management is focused on moving Ireland away from an over-emphasis on residual waste management and towards a focus on prevention, minimisation and recycling.
Significant progress has been made on the waste agenda in recent years. For example, the overall rate for recovery of municipal waste rose from 9% at the end of the 1990s to 38% at the end of 2008. However, we must consolidate and build on this progress. In this regard, I recently launched a consultation process on a draft Bill which has been approved by the Government for the application of levies to landfills and incinerators. The levies will be designed to ensure material which can be recycled and add value is not drawn to large-scale residual waste treatment facilities. Therefore, it is envisaged that a banded series of levies will be applied to facilities based on capacity. The levies are also seen as a means of driving material away from landfill to meet challenging EU targets.
I recognise that levies are simply a part of a range of measures which will contribute to the development of a sustainable, resource-based waste management policy. In this regard, in the coming weeks I will launch a consultation document which will have as its basis the recommendations made in the consultant's report and set out the various elements being considered as part of the development of a new waste management policy for the country. In this way everyone will have an opportunity to contribute to the development of the Government's waste management policy.
Our natural and built heritage is an invaluable asset which, despite the difficult times, must be protected both in its own right and because of the contribution it makes to supporting employment, attracting tourists and enhancing the quality of people's daily lives. Therefore, I am very pleased that we have been able to increase the total resources for the built and natural heritage this year to almost €57 million, an increase of 6% on last year's outturn.
I have touched on several activities across my Department's broad remit, with particular emphasis on those with significant financial provisions in 2010. My colleague, the Minister of State, Deputy Cuffe, will complement what I have said in respect to his area of responsibility. I will be pleased to deal with any matters Members wish to raise.
