Let me again remind the House that last October in my very early days as Minister for the Environment, I gave my personal commitment, and that of the Government, to ensuring the future development and well-being of the building and construction industry, to ensuring a high level of house completions and an expanded programme of infrastructural services.
The undertakings given by me in October last have been honoured by appropriate resource allocation as provided for in the investment plan and in the budget. Capital monies on a scale unprecedented have been provided for 1981 for roads, sanitary services and the building and construction industry. I am confident that the massive increase in resources now made and proposed for the future will provide the necessary infrastructural base to meet the needs and challenges of the eighties. In addition it will build up the necessary confidence to stimulate economic development, tourism and agriculture. I welcome the positive approach expressed by varying organisations to the Government's vastly expanded capital programme. I will now deal separately with some of the main services for which I am responsible.
When I spoke in the budget debate I said that, for the building industry, the budget was a good budget. It was a good one because it provided a very substantial increase in public capital investment in the industry in 1981 and new incentives for private capital investment. In addition it brought with it a lift-off in terms of new work, more employment, greater investment and a return to confidence and a preception of the end of recession. The building industry is now about to move into top gear with increased growth and employment right across the whole building spectrum and throughout the country.
The Government's strategy for the industry laid down in the investment plan is based on confidence and a realistic balance between the country's needs and aspirations. With the fastest growing young population in western Europe and an economy with equal potential the building industry has both a formidable task and an encouragingly bright future ahead of it. Its task is to provide the necessary infrastructure for our future development while at the same time making one of the most substantial contributions to current employment. It is for these reasons that the Government put together their investment plan package for 1981 providing greatly increased capital investment in all the major areas of infrastructure including energy, telecommunications, roads, sanitary services and housing. Both output and direct employment in the building industry in 1981 will increase relative to 1980. In addition, extra jobs will be generated in the building materials manufacturing and supply services. As I said, the main generator of this growth is the increased capital provisions announced in the investment plan and provided for in the recent budget.
Turning to housing, which is the most important sector of the building industry, Deputies will be aware that the record in housing completions in recent years has been good. Housing completions have increased steadily from the 24,000 completed in 1976 to 27,785 last year, the highest number of annual completions ever. The Government commitment to housing is reflected once again in 1981 by the public capital programme allocations to this sector which amount to £242.4 million, compared to the provisional out-turns of £159 million in 1979 and £201 million last year. In order to eliminate any doubt about our housing achievements, I would like to quote some international comparisons which show that we have a record in this area of which as a small nation, we can be justifiably proud:
—In 1979, we shared with France the record of having the highest number of houses completed per 1,000 of the population in the EEC; in 1975 the last period of Coalition we had the lowest rate. I have no doubt but that we will also fare well when the 1980 figures are published.
—Also in 1979, capital formation in housing expressed as a percentage of gross national product at 7.3 per cent was the highest rate in western European countries for which figures are available.
—The Government's commitment to the encouragement of owner-occupation is reflected in the fact that our rate of owner-occupation at 75 per cent is probably the highest in Europe.
The Government are not, however, concerned simply with housing numbers for the country as a whole. Our aim is to have a sufficient number of houses provided in the right place at the right time and at a price or rent designed to meet established housing needs. It was for this reason that local authorities were asked in early 1980 to carry out assessments of the nature and extent of accumulated housing needs in their areas and of prospective needs expected to arise up to 1985. This exercise, which is currently being finalised by the authorities, has been the most detailed and sophisticated ever attempted and involved the authorities in a comprehensive survey of some 25,000 houses. Internationally accepted techniques of assessing housing need have been used and authorities are availing of a wide range of data from the 1979. Census along with information contained on applications for rehousing from their waiting lists and from results of inspections and surveys carried out by their officers together with local knowledge and experience. I am satisfied that the assessments when analysed by my Department will form a good basis for identifying the areas of housing where directional changes in policy may need to be considered and for the determination of an overall national housing strategy into the eighties by the Government.
One specific area of housing is deal with in sections 21 and 22 of the Finance Bill. The Government have decided to make available a special tax allowance of 100 per cent of expenditure on development and construction incurred after budget day and before 1 April 1984 or the provision of moderate-cost rented residential accommodation and on certain conversions of existing buildings into two or more residential units. The new allowances will be set against rental income in computing tax liability. This is an important initiative by the Government because a need for moderate cost rented housing accommodation does exist and is not being fulfilled at present. I am sure that the new concessions will provide the necessary incentive to the private investment sector to become involved in the provision of rented housing accommodation to meet this existing need. I look forward, therefore, to a positive and quick response from the private sector to the new concession.
The provision of mortgage finance is of major importance and, in this context, I am particularly conscious of the importance of the local authority house purchase loan scheme in providing finance for those categories of persons who are not catered for by the commercial lending agencies. Since resuming office in 1977, the Government have kept the loan and income limits at sufficiently realistic levels to enable the categories of persons for whom the scheme was designed to continue to benefit from it. In January 1980 the loan and income limits were increased to £12,000 and £5,500 respectively. The upsurge in demand which followed on these increases was unprecedentedly high and, while gratifying, made the financing of the scheme a major burden on scarce capital resources. In spite of the many competing claims on the limited capital available, an additional allocation of £7 million was provided in 1980 to enable authorities to advance 7,309 loans to the value of £65 million.
Demand for payment of loans under the scheme continues at a very high level and I am pleased to point to the record sum of £96 million which has been provided to meet demands for house purchase and improvement loans and supplementary grants which will arise in 1981. This compares with expenditure of just under £20 million in 1977, the last year of the Coalition Government. I have already notified authorities of the amounts available to them for expenditure on the scheme this year and I am confident that it will be sufficient to enable them to meet their commitments without undue delay.
It is my intention that the loan and income limits which govern the local authority housing loan scheme will be kept under continuing review to ensure that they remain at a realistic level.
Building societies play a major role in the financing of the Government's private housing programme. Almost 75 per cent of all private housing finance is provided by building societies. Societies advanced 16,944 house purchase loans to the value of £269 million in 1980, providing mortgage finance amounting to £126 million in respect of 7,807 new houses and £143 million in respect of 9,137 others. I am pleased to draw attention to the fact that the Government's decision to make an interest subsidy available to societies with effect from 1 June 1980 was a major factor in attracting the inflow to societies which made this possible. I expect that societies will make in excess of £300 million available towards financing the Government's private housing programme in 1981.
On the local authority house building side, it has been this Government's policy to maintain a stable programme of about 6,000 completions each year. Despite the financial difficulties which have beset the programme in recent years because of ever increasing costs, the Government have nevertheless managed to exceed this target each year since 1977, including 1980. In order to achieve such a target, the level of work in progress must be maintained at a monthly level of at least 8,000 and I am glad to note that at the end of January the number of units in progress was 8,375, so that the programme is running at a satisfactory level at present.
I would like to emphasise the valuable contribution which the local authority housing programme is making in the area of employment. At the end of December 1980 a total of 7,069 were engaged on the programme, compared with 6,769 for the corresponding month in 1979. The average monthly employment throughout the year of 6,870 was the highest for recent years. Taking the overall view, this Government have achieved an impressive record in providing local authority housing. The fact that the Government's target has been consistently achieved must be looked on as a manifestation of the Government's determination to honour its commitments to those in need of housing.
The provision and maintenance of an adequate road network is one of my top priorities as Minister for the Environment. In Ireland, the road network is the infrastructural base on which depends, to a great extent, the prosperity of agriculture, industry, commerce and tourism. Our geographical position as an island on the periphery of Europe, together with our low density of population, has placed us in the position of being more dependent on the road network for physical communication and movement than any of our European neighbours. The accelerated increase in the numbers of motor vehicles as a consequence of our economic and social development has highlighted the deficiencies of the road network. In particular, the early years of the last decade saw the growth in road transport imposing a heavy burden on the road network. In consequence, strategic sections of principal roads seriously deteriorated and traffic congestion has become an everyday feature in a number of our cities and towns.
The situation that had been developing at this critical period of our economic growth called for a reappraisal of our system of planning for road development. The Government, immediately on assuming office, set to the task of preparing a co-ordinated plan, involving a much larger scale of investment, to bring the network, particularly the principal routes, to a standard capable of meeting present and future needs.
The Road Development Plan for the eighties, which was published in 1979, was an unprecedented step forward in road planning in Ireland. The programme of works outlined in the plan is based on analyses of deficiencies identified in the system by studies carried out by An Foras Forbartha and by land-use, transportation and traffic studies carried out in Dublin, Cork, Limerick, Waterford and several other urban areas, and also by the development plans of the local authorities and regional development organisations. The programme has been generally accepted, not only by road authorities but also by commercial and transport interests, as a balanced and realistic one.
The Government's objectives for the development of the road network as outlined in the road development plan, can be summarised as follows: the preservation of the overall network up to a satisfactory standard; the provision of an adequate strategic inter-urban road system connecting the principal towns, seaports and airports; the adoption of a minimum two-lane standard for the national route network, without prejudice to the necessity for higher standards for particular sections of that network; the provision of by-passes of towns on the national routes where these are considered necessary on planning, traffic or environmental grounds; a special programme to meet the need for new river crossings, ring roads and relief routes in the county boroughs and other major urban centres.
The major road network is identified in the investment plan as deserving of considerably increased investment this year, along the lines proposed in the road development plan. I am very pleased to have been able, in my first year as Minister with responsibility, to provide a massive £80 million in road grant expenditure this year for road improvement and maintenance works.
On foot of this provision of £80 million I have been enabled to allocate grants to road authorities this year totalling over £87 million, of which £67 million has been allocated for improvement works and £20 million for maintenance. This represents an increase of 49 per cent on the road grants allocated last year and of a staggering 227 per cent on the level of grants which were provided by the previous Government in 1977. This level of finance, unprecedented in the history of the State, should leave no doubt in anyone's mind regarding the Government's and my determination to bring the standard of the road network into line with the demands of modern transportation needs.
I have allocated over £31 million for major improvement works which are listed in the Road Development Plan. In the Dublin region these schemes include a new road from Whitehall to the Airport; by-passes of Swords and Balbriggan; a new road linking Clontarf Road with the East Wall Road: a new bridge adjacent to Heuston Bridge and a by-pass at Palmerstown on the road westwards.
In Cork City I have allocated grants for three new bridges over the Lee and a new ring road as recommended in the Cork Land Use Transportation Study. I have also made grants available for ring roads in Limerick, new bridges in Waterford, Athlone and Galway and inner relief roads or ring roads in Sligo, Dundalk, Drogheda, Kilkenny, Tralee and Clonmel. Other major projects outside the main urban areas include the Naas by-pass; new Cork-Mallow road; new road through the Curragh; and ring roads or by-passes at Mullingar, Navan, Carrick-on-Shannon, Dunleer, Collooney, Ballinasloe, Oranmore, Roscrea, Donegal, Midleton and Dungarvan.
While the major works are, of course, the most dramatic element of the Road Development Plan, the plan also provides for a continuous year by year programme geared towards the essential development of the existing road lines including realignments, strengthening, widening, eradication of accident black spots and provision of hard shoulders. I have allocated grants of over £21 million for such works in 1981. I have also provided substantial grants to road authorities to supplement their own resources and also grants for special works, including bridge works, on roads other than national routes. The need for strengthening and renewal of critical sections of the principal roads has not been overlooked and the grant allocations I have made provide for expenditure of over £6 million for a special programme for such works.
The 1981 grants programme is, by any standards, an ambitious one. The provision of major road improvements is not always easy and is never cheap. Preliminary results of a special progress report undertaken by my Department on the major works programme for 1981 are encouraging and I am confident that the end of the year will see a major advance towards the development of a road network adequate for the eighties and beyond. I am also aware of the valuable supplementary benefits to be derived from a full roads programme in that it creates activity in the construction industry, generates employment both on-site and off-site and utilises materials and equipment of Irish manufacture. I expect that up to 11,500 road workers will be employed directly on the 1981 works programme which will represent an increase of over 600 on the corresponding figure for 1980.
Apart from the country's public road network there is a considerable mileage of non-public accommodation roads which are of particular importance to the agricultural community. Grants under the local improvements scheme cater primarily for the improvement of these roads. I am pleased to say that the total provision for the local improvements scheme for 1981 is £2,714,000 which represents an increase of almost 36 per cent on the 1980 allocation. The scheme is of particular benefit to the western counties and provides valuable seasonal employment in the rural areas. This year it is expected that works undertaken by country councils under the local improvements scheme will provide the equivalent of 300 man-year jobs. This year also a proportion of the expenditure in the western counties under the local improvements scheme as well as on selected county roads in these areas will benefit from EEC aid under the western package.
Interest has been displayed by the private sector in the financing of road and bridge projects. The Local Government Toll (Roads) Act, 1979, was specially enacted to facilitate private sector participation in such projects. There is a firm proposal to provide a toll bridge over the River Liffey, the cost of which will be privately financed. Public inquiries have been held into a toll scheme, which has been made by Dublin Corporation, and a bridge order application made by Dublin Port and Docks Board. I will consider the report on these inquiries and give my decision on them without delay.
Sections 23 and 24 of the Finance Bill are designed to provide certain tax incentives to encourage private sector participation in the provision of toll roads and bridges and multi-storey car parks. Discussions have already taken place with private sector interests with regard to participation in such projects and interest has already been expressed in relation to the construction of multi-storey car parks in Dublin and Cork. I am confident that the tax incentives provided under the Finance Bill will encourage the provision by the private sector of much-needed necessary additional facilities in this area.
The existence of adequate water and sewerage services is essential to the development of any area and to the protection and improvement of its amenities. Such services provide the essential infrastructural base on which a number of other programmes such as industry, housing, agriculture and tourism must be based. They are a necessary pre-condition for the whole process of economic development at national and local level. It is vitally important, therefore, that we have the necessary sanitary services schemes available to take advantage of the future improvement in the climate for productive investment.
I can assure the House of the Government's and my personal commitment to making the necessary allocations, both now and in the future, in order to provide services on the scale required to meet future needs. Our record in the past is of course impressive. Between 1977 and 1980 alone the Government almost doubled the overall public capital programme provision for public water and sewerage schemes — from less than £25 million in 1977 to almost £47 million in 1980. I am especially pleased to have been able, just as I have done for roads, to make provision for very substantially increased funds for 1981 — a total of some £67.3 million for public schemes for 1981 compared with the £47 million for 1980. This represents an increase of some £20 million or 44 per cent.
These extra funds have enabled me to approve contract documents for 45 new major public water and sewerage schemes with the estimated total value of about £27 million. Local authorities undertaking these schemes are now free to invite tenders and financing will be arranged in due course. Work and direct employment on most of these schemes will commence during the current year. Schemes released for commencement include: Mid-Galway water supply scheme; Kerry central regional water supply scheme — Contract 1; Tallaght water distribution network, Dublin; high level water supply improvements, Cork city; Bally bay/Lough Egish water supply scheme, County Monaghan — Stage 1; and Lettermacaward water supply scheme, County Donegal.
I am also proud of the fact that, since 1977, the cost limit for small public water and sewerage schemes has been increased from £20,000 to £30,000; and that the overall capital provision for small schemes has been increased more than fourfold — from about £1 million in 1977 to £4.5 million in 1981. Many extensions-improvements can be financed under the small schemes programme to meet urgent needs arising, pending the execution of major schemes. The programme also plays a positive and important role in helping to maintain direct labour force employment by sanitary authorities.
One of the happiest and most satisfying features of rural life in this country has been the tremendous upsurge in recent years in the number of private group water schemes undertaken by local communities with generous grant assistance from the Government. The Government substantially increased grants for group water schemes commenced on or after 1 November 1977 from a maximum of £200 per house to a maximum of £300 per house. An additional grant of up to £200 is payable per farmer member of the group.
The Government also took over liability for supplementary grants formerly payable by local authorities, thereby releasing ratepayers from the financial liability involved. As a result of these measures, State expenditure on group scheme grants increased from £1.1 million in 1976 to £4 million in 1980, and group scheme installation increased each year from 7,930 in 1977 to over 10,000 per year in the years 1978 to 1980. At the end of 1980, nearly 3,000 schemes had been completed and approximately 88,700 houses and over 70,000 farms had obtained water from group schemes. In addition, work was in progress on the installation of water in another 8,000 houses and over 220 schemes had been designed to serve a further 7,100 houses approximately.
My colleague Deputy MacSharry, Minister for Agriculture, has recently announced that the Government's programme for the development of agriculture in the west of Ireland has been cleared by the EEC Standing Committee on Agricultural Structures. I will shortly be in a position to announce details of grants for rural water schemes in the west, 50 per cent of the cost of which will be recouped by the European Agricultural Guidance and Gurantee Fund, FEOGA. At this stage, I can indicate that my announcement will include details of new capital grants for rural public water schemes, and greatly increased grants for private group water schemes. I have no doubt that this grant assistance will give a considerable boost to the rural water supply programme in the west, and ensure substantial progress to our ultimate goal of a rural water supply in every house and farm in the country.
Since 1 January 1978 over 950,000 ratepayers have been fully relieved of the burden of rates. These properties include domestic dwellings, secondary schools, farm out-buildings and community centres. These reliefs are substantial. Were it not for our decision to remove rates on houses, a modest house with £20 valuation would, in 1981, attract a rates burden of £285 in County Wicklow, £273 in North Tipperary, £296 in County Galway, £391 in County Mayo, £277 in County Cavan and £238 in County Monaghan.
The farming sector has not been forgotten either. This year, rate reliefs to farmers have been increased to an unprecedented level. Up to now only farmers with land valuations of £20 or less got full relief of rates. This year farmers up to £50 valuation are relieved of all rates on land. This means that a further 80,750 holdings, those with valuations between £20 and £50, will be fully derated for the first time. Farmers with land valuations between £50 and £70 now pay only half the rates on their land valuations. Farmers in urban areas will be entitled to the same rates reliefs as apply in county council areas. These are worthwhile reliefs for the farming sector. These relief measures for land alone, will represent a subsidy of some £62 million to ratepayers in 1981.
In addition farmers, of course, continue to benefit from rates relief on their dwellings and on farm out-buildings which we brought in with effect from 1 January 1978. The guidelines which have applied to local rate increases over the past few years have ensured that the business community and others who remain liable for rates have not had to suffer as a result of the changes in local finance.
The contribution which the building and construction industry and road and sanitary service works must make to our economy is immense if we are properly to develop industry, tourism and agriculture in order to meet in the eighties the aspirations of our very young, growing and well educated population. The provisions made in the budget and the Finance Bill are designed to ensure that the potential for expansion of these critical services is fully realised. I am confident that the measures taken in the areas for which I am responsible will be a key factor in the future expansion and well being of our economy.
I would also like again to assure the House of the future continued well being of the building and construction industry under the Government. The industry can feel secure in the knowledge that in a time of difficulty my colleagues and I as a Government act, as we did last autumn by providing the necessary additional funds to stimulate the industry at a time when it was showing signs of slowing down; as we have now done by providing vastly increased capital allocations to create the necessary confidence to boost the economy. I am glad to note that these decisions are already beginning to bear fruit. Regretably, the lesson to be learned from the past experience is that the building and construction industry can feel no such security under the Opposition when in Government. My colleagues in Government and I will in 1982 again provide the necessary capital to continue to finance the vastly expanded programmes now under way—and let there be no doubts about it we will be here throughout 1982 fully committed to seeing to finality the vastly expanded programmes now being carried out, especially in the areas of building and construction, including roads and sanitary services.