I congratulate the Minister and his Department on the Estimate they have put to us which, as several Deputies have said already, is an enormous increase on the previous vote for this Department to a figure of £205 million. As has also been pointed out the Department have responsibility for funds of the order of £560 million, which is an enormous responsibility for any Department. I congratulate the Minister for restoring confidence in the building industry. The Minister has delivered on the election manifesto promises, he has increased income limits for the SDA loans, he has increased the loans, he has given us the £1,000 grant and he has removed the rates. The Minister has also given us some new house extension and improvement grants which are very important to people in this day and age and he has improved the assistance for the handicapped.
These are all contained in the Estimate. I mentioned some of them merely to indicate the size of the task before this Department since this Government took office and of the task which has been before this Minister and to which he has given his time very capably. This time last year there was considerable despondency in relation to this sector, particularly in relation to the building industry. Then positive plans were put—admittedly the economic environment improved at the same time—at a time when very few were prepared to put forward such positive and decisive plans and objectives. This is the way I should like to see many Departments behave in relation to many of our problems—be prepared to take on the challenge of change and not be afraid to step out and do something which is new and different.
Housing is a vital need in our society. As a country traditionally we have aimed at home-ownership, a very reasonable aspiration, but one which can become difficult. The Minister has highlighted some of the difficulties he has experienced in this respect. He has talked about the problems of land, the cost of land, building costs, market prices and their vagaries. He has spoken about the difficulty of the scarcity of houses. He has an extremely difficult area with which to deal here. Nevertheless we need continuous planning and review of housing finance. We need first a constant supply of money for the purchase of houses and, secondly, to be concerned about how this money is allocated.
Looking through the Estimate I note that, in relation to the supply of money, the building societies now are by far the greatest provider of finance for housing. If one looks at the 1977 figures one finds that building societies provided £120 million of the £170 million paid out. The associated banks provided £27 million, local authorities £17 million and assurance companies £6 million. I find that somewhat disturbing in that I should like to see the assurance companies' contribution being of a higher order. In the past they provided more money for housing. Certainly I would be concerned about the obligation on various organisations within our society to make some provision for this social need. This year the building societies will provide £150 million which will be, again, by far the biggest slice of the cake, with the associated banks rising by a relatively small amount, a figure which is really only of the same order as that of 1977, that is, £30 million, and local authorities, £39 million.
A good supply of houses will help to stabilise their prices. I do not think anybody can deny that, but that can come only from an increased and reasonable supply of money. I am concerned about the size of the assurance companies' contribution in this respect. If we look at the other financial institutions we may say to ourselves: what contribution do they make to this social need? There are the non-associated banks, the high-profit merchant banks, the high-profit subsidiaries of the associated banks, even the credit unions—where do all these financial institutions come into the total mix? One could go further and say that one would like to see finance coming from a much wider range of organisations. I shall refer to that later.
There is a problem which has been referred to here by Deputy Tully, in particular, and some others. This I would describe as the gap between wages and home-ownership. As we know the building societies lend up to two-and-a-half-times one's salary. They provide 70 per cent of the loans. The banks and assurance companies have similar terms for their lending. That leaves SDA loans with only the equivalent of 10 per cent of the total at this stage. I would be very much concerned that there would not be sufficient money available to the lower income groups. Deputy Tully made the point: can these people afford to pay the interest charges and mortgages in any event? It is our duty to ensure that there will be a sufficient supply of money for moderately-priced houses for people in this category.
Of course stability of wages is essential to economic development and job creation. Combined with increasing house prices, it can only diminish the prospect of home-ownership for young married couples and the lower income group generally. Here we must be particularly concerned. While saying that I recognise that the Minister has taken very dramatic steps to offset, in a major part, this gap by facilitating home-ownership. These steps include the £1,000 grant, which is of particular benefit to people in this situation, the removal of rates, which is an aid to them in starting out the reduction of SDA interest rates from 12½ per cent to 11½ per cent, the increased SDA loans to £7,000 and the increased availability of loans to local authorities from £17 million in 1977 to £39 million in 1978. I am not saying that the Minister is not doing his part currently; he is, and is doing it very well.
The Minister has indicated that he is concerned about the situation further along the road. He has said also that, in relation to the £7,000 loan limit, he will revise this if it becomes necessary. Of course, this would place an increased burden on State financing. Here we revert to our original equations in which building societies are providing the major share and some other bodies are not providing anything.
I tend to look at the country as a place in which we all live and hope to work happily together, to share things to whatever extent is reasonable. Consequently I should like to see more participation in these areas by these various financial bodies. Perhaps the Minister would consider setting up a Home Loans Fund which could be financed by the banks, assurance companies, credit unions and commercial organisations—here one comes to mind particularly, Cement Roadstone, a very large, efficient and successful one. This organisation is dependent on increased building and house-purchasing. If we look at the various bodies throughout the country and ask ourselves what is their social contribution, I should like to see coming from them some voluntary social contribution, especially in the areas which will be of most benefit to them ultimately. It is said in the Cement Roadstone Annual Report of 1977 that Cement Roadstone Holdings is Ireland's leading supplier of raw materials to the building and construction industry and has its head office in Dublin. Its total assets are £171.4 million. It is said also that since 1971 sales have increased from £33.1 million to £134.4 million and profits from £4.1 million to £14.8 million. The report goes on to talk about dividends per share and that sort of thing. One can see the growth of the company in line with the growth in the economy. The report mentions specifically that a wide range of materials is produced for the construction and furbishing of houses, factories, hospitals, schools, offices, roads, agricultural buildings, harbours and for other civil engineering projects.
I do not think we need to labour the point. This is an example of a commercial organisation with a very substantial interest in housebuilding and property development generally, and I would appeal to similar organisations to make a contribution to such a home loans fund. There are other commercial companies who could contribute even a percentage of their essential reserves, and the building societies could contribute, say, 5 per cent to be used in this way, with the State matching it, £1 for £1, or on some other ratio.
I regard this concept as a good one. Certain people might wish to contribute to it as a long term investment. We are all vitally concerned with the economic growth of the country and the position of young married couples and their ability to cope with economic situations. The use of such a fund would be to provide long term, say 30 years, loans at fixed low interest rates for first time purchasers of the standard traditional type home which is the normal family objective. I accept that if people are to progress from that sort of arrangement for their housing finances it should be to building societies, but the first objective should be to take people off the road, as it were, and put them into houses.
The present value of the standard home is open to discussion because of the changing nature of house prices. The Minister is working hard to overcome this, in which there is an important element of scarcity. The present value of such a home would be between £12,000 and £18,000. When I made the notes from which I am speaking a couple of weeks ago I was thinking in terms of £15,000, but in the meantime I have looked at it and it seems the standard objective should be a little more.
I suggest that we should adopt this as a reasonable aspiration or objective. On the continent there are different circumstances, but we have always valued the home, the family and home ownership on a different basis and it would be a pity if we should drift from the reasonable aspirations we have had. It is a matter of bridging the gap between incomes and home ownership, a function which the SDA did in the past. The people who would benefit first would be newly married couples and others on low income.
I do not wish to delay the House— there are many matters I should like to deal with on this very interesting Estimate—but it would be remiss of me not to refer to mortgage interest rates and to congratulate the Minister on fixing the interest rates for guaranteed loans in relation to approximately 1,000 houses at 9 per cent and restoring them to the original rate. This has been welcomed by the people concerned, and the Minister's sympathy with the problem which was created for many of those people is appreciated. The Minister has noted that there has been a welcome fall in mortgage interest rates, from 13.95 per cent to the present 9.5 per cent. The very high rate of 13.95 per cent placed an excessive burden on home owners, families in particular. I know of cases where it actually took bread from their tables.
We must have a more rational and sane approach to interest rates, and I would ask the Minister to investigate the possibility of having building societies' interest rates fixed, even for limited periods, and reviewed at, say, the end of two or three years. That would give some element of stability to owners who had purchased through such societies. It affects the vast majority of our people, and I would be concerned about it in the future because of the kind of mortgages and the variations which can arise from time to time.
I accept that the Minister and the Cabinet have been doing tremendous work in relation to inflation and that in the indefinite future such a problem might not arise, but we should be prepared for the future. Therefore, a rational approach to housing is vital to our people. The Minister might consider setting up an interest stabilisation fund. I am not a financial expert in this area—I am more a practitioner at the family end—but I am concerned at the general operation of the building societies and the methods of allocating finance for housing by the societies, the insurance companies and the banks. Therefore, it would be valuable if the supply and allocation of housing finance could be examined periodically by the Minister with the assistance of an expert review body.
In regard to the tenant purchase scheme, the Minister has increased the grants to local authority tenants from £900 to £1,300 and the interest charges have been reduced to 11½ per cent.
He has also maintatined the maximum discount. That is very worth while, a positive contribution to tenant purchase. The scheme has been successful, though at times controversial, and has been well worth while in our society. House prices have tended to increase because of inflation, and a great deal of it occurred immediately before the Minister assumed office. He took immediate steps to deal with it, and the 1977 scheme is a considerable improvement on the 1976 one under the previous Government. I ask him to keep the scheme under review to ensure that low income families will be enabled to purchase their homes.
There is another matter to which I should like to refer. It is the provision of dwellings for elderly people, and I will not let this opportunity pass without congratulating the Minister and the community and environment department of Dublin Corporation for the excellent work they have been doing in this respect. In the past five to seven years the work has been of a somewhat experimental nature, and a very successful experiment it has turned out to be.
I think it is demonstrably so in a variety of areas. The schemes that have been established by the local authority in areas like Raheny, Baldoyle, Donaghmede, Kilbarrack and Killester are functioning very successfully and, as the Minister knows, there is tremendous demand for these flats.
I am somewhat concerned about the position of wardens in this respect. I should like the Minister to keep that matter under review because it is an area that has developed rapidly very recently and could do with re-examination at this stage. I am particularly glad to see the extent to which the local community have become involved in the centres or flats for elderly people. They are doing wonderful work and deserve every credit from the Minister and the House.
The possibility of reversionary interests in relation to elderly people's homes received a lot of publicity recently—the idea that the corporation or local authority might consider a scheme whereby they would buy back homes from elderly people and maintain them over a period. I shall not go into the matter, but there is an aspect in relation to the practical findings on the ground as I have seen them. It is the tremendous need for sheltered and cared flats for the elderly. There is a tremendous response where they are provided. The Minister will probably find far more people seeking entry to these flats than there are flats available. The idea offers independence and security. As I have experienced them in Dublin they are separate, self-contained flats with a warning bell to a central warden. They also have central community facilities, such as canteens and recreation rooms. One can, in advancing years, have the full benefit of independence, which is so much valued by elderly people, and at the same time have on call the facilities one may need. I have found people quite anxious to sell their private houses to get into some situation like this where they have a degree of care. It should be worth considering the possibility of introducing a scheme to provide more of these sheltered flats for those who need them and allocate space in communities for them before all the space is gone. There is not much space left in Dublin now.
We were particularly fortunate in my area, when the corporation scheme was being developed close to us, in that we went into consultation eight or nine years ago with the corporation about the development of the scheme. We then realised, because we sat around the table, that there would be no provision for the future for elderly people in the area. The officials in what is now the community environment department were very keen to have something established in that line. It was established, and has been extremely successful. The problem now is that there are far more people there, young people who want to bring their parents to live close to them where they can still have independence. There are other ways of approaching this problem, such as the granny flats, and the Minister has provided for extensions in this regard of which many people will avail. In our case this was something of an experiment which has been successful. The idea could well merit fairly urgent attention particularly as regards setting aside sites for such flats throughout the city.
I am very glad to note that the Minister is considering what reforms are necessary in local government structure and that he will examine all the area proposals. He says that he has under consideration the question of what reforms may be necessary and that it will involve a study of all area proposals for reorganisation. I know this is a very thorny question. Let us be honest. It is a question of power and its devolution; but we must recognise that in recent years we have had a tremendous growth in community organisation, particularly in the last five years. There is a challenge to us to provide the structures which will provide for the devolving of more responsibility to local communities. The Government Departments need the co-operation of responsible local communities in doing their work. I emphasise "responsible" and I recognise such involvement can only come if the local communities rise to a level of responsibility. The Department of Justice repeatedly emhasises that if we are to have peace they must have the support of local communities. In the case of the Departments of Health and Social Welfare we can readily see that they are concerned with the care of the aged, handicapped and the sick and the means whereby these people can have a full life in their community.
In the case of the Department of the Environment, tremendous work has been done, particularly in relation to community and environment. In Dublin, as I found it and throughout the country generally I am sure, the work being done in tree planting and landscaping is long overdue, but it will do a great deal to improve the environment. The information centres that are being set up are also very valuable and in future people will increasingly use them.
But we need more devolution and decentralisation of all services. We need structures which will ensure responsible local control and involvement. Local community organisations must be recognised in planning decisions for their areas. We have not been noted for this as a country in the past but it is time to introduce structures which more clearly and definitely recognise the function and role of the local community in planning decisions affecting their areas. I shall not go into some of the decisions that have been made in recent years. They have been anything but good for communities in certain instances. I should like to see that people who are going to live and bring up their families in an area would be given more of a say in what happens in relation to their area.
It is easy to make decisions at a distance when one lives somewhere else. It is too easy to take the line of least resistance in that respect. We should provide for public administration and structures which will cater for people in their own communities. For instance, who is planning for the employment needs of particular areas in Dublin? I am concerned with the Raheny area as a centre which includes Edenmore, Grange Park, Mount Olive, Swansnest, Millbrook, Saint Donagh's, Kilbarrack, Bayside, Baldoyle. Each of these areas is as big as a small town in the country and consequently an area like Raheny could readily serve as a centre for local government administration which would be very close to the community. We need more effective local structures and the allocation of staff and resources to the local community. It is, of course, a two-way process. It calls for responsibility from the local community and for an enlightened and adventurous approach to public administration from the Department of the Environment.
It is time to make advances in the structure of local government and the involvement of communities and I welcome the Minister's commitment to an early review of proposals for reorganisation. I congratulate the Minister and his Department on improvements to date and I wish the Minister every success.
