Dáil Éireann Debate, Wednesday - 18 June 2014
108. Deputy Sean Fleming asked the Minister for the Environment, Community and Local Government the implications for the future delivery of services by local authorities of his decision to discontinue the 2010 land aggregation scheme which was designed to relieve councils of development debts, by housing them in a separate body; and if he will make a statement on the matter. [26263/14]
View answerThe Land Aggregation Scheme was introduced in 2010 as part of revised arrangements for the funding of land for social housing purposes. Applications to the value of some €164 million in loans, were accepted into the Land Aggregation Scheme.
The figure of €164 million includes €111 million in respect of loans which were fully redeemed by local authorities with funding recouped from my Department, under the original terms of the Scheme. The remaining €53 million accepted into the Land Aggregation Scheme is in the form of annuity loans, for which local authorities are making repayments to the Housing Finance Agency. Such annuity repayments are recoupable from my Department subject to the local authority complying with terms of the Scheme.
In 2013 as a consequence of continuing pressure on Exchequer resources, and following a review of the Scheme carried out in consultation with the Department of Public Expenditure and Reform, it became evident that further expenditure on the Land Aggregation Scheme, in terms of accepting new applications into the Scheme, was no longer a sustainable option. The review concluded with the issuance of Circular 35/2013 on 11 December, 2013, notifying Local Authorities of the discontinuance of the Scheme in respect of new applications.
The focus of the Scheme has now shifted to the management and utilisation of the lands included in the Scheme. The Housing Agency is developing a strategy for the utilisation of transferred lands, which will involve consultation with the relevant local authority and other appropriate parties. The development of this strategy is being progressed in the context of the new Social Housing Strategy, a Departmental commitment under Construction Strategy 2020.
I recognise the cessation of the Land Aggregation Scheme presents challenges for some local authorities. However, it is a matter for each local authority to determine its own spending priorities in the context of the annual budgetary process having regard to both locally identified needs and available resources. The elected members of a local authority have direct responsibility in law for all reserved functions of the authority, which includes adopting annual budgets, and are democratically accountable for all expenditure by the local authority.
Following the discontinuance of the Scheme, local authorities had been advised to consult with the Housing Finance Agency directly on the management of loans relating to lands not accepted into the Land Aggregation Scheme. I understand the Housing Finance Agency has made arrangements directly with some local authorities to extend interest-only arrangements to land acquisition loans, on maturity, for a further five years, after which they will revert to normal-course annuities.
