Dáil Éireann díospóireacht -
Tuesday, 6 Jul 2004

Vol. 588 No. 5

Adjournment Debate.

Planning Issues.

Mr. Ó Fearghaíl

I thank the Cheann Comhairle for allowing me to raise the issue of IDA Ireland's objection to the granting of planning permission for a light industrial and commercial development at Woodstock, south Athy. I thank the Minister of State, Deputy Michael Ahern, for being present to deal with the issue.

The development in question involves the construction of 11 light industrial units and one office block on a site of approximately 17.8 acres at the edge of Athy, County Kildare. It is intended that the facility will accommodate a number of established local businesses in need of expansion space, together with a number of new enterprises badly needed in the area.

The site is appropriately zoned, having been included in the Athy area plan in 2000. The 17.8 acres is accessed by good quality road and is immediately adjacent to existing industrial premises, including an advance factory built by IDA Ireland at Woodstock industrial estate. Following the rezoning of the lands in 2000, the landowner and prospective developer, anxious to press ahead with the development of his lands, approached his neighbour, IDA Ireland. At issue was the matter of access to his property.

Until then, the landowner had an agreement with the IDA to access the lands for agricultural purposes but understood that approval from the authority as owners of the road was required in order to change this use. Following a series of contacts with IDA, it became apparent that it controlled not just the access road but also the other essential services — water and sewerage — none of which had been taken in charge by Athy Town Council, albeit that the road services had been in place for 25 years.

Following an on-site meeting with representatives of the IDA's property division, it was indicated to the landowner that the development authority would require a contribution in excess of £1 million for access to these services. Common sense prevailed, or appeared to prevail, because it was eventually agreed that if Athy Town Council took in charge the services at Woodstock industrial estate, there would be no basis for the IDA to demand a contribution from the proposed developer.

In early 2003, therefore, confident that all the issues had been resolved, or were on the way to being resolved, the aforementioned planning application was lodged with Athy Town Council. The council, by resolution at its meeting on 15 October 2003, agreed unanimously the taking in charge of Woodstock industrial estate. On 27 April 2004, the town council granted permission for the industrial and commercial development subject to 44 conditions which included a contribution of €822,825 towards the provision of services. Astonishingly, this decision to grant permission with its consequent positive implications for jobs in the area has been appealed by IDA Ireland to An Bord Pleanála.

I say astonishingly because Athy is a RAPID town. It was until recently County Kildare's unemployment blackspot and it continues to need the active support of Government agencies. There is a strong view in the area that the IDA has failed to fulfil its remit. While there is a widespread welcome for the fact that the long-built advance factory has now been occupied by DSG Packaging with 40 employees and the promise of 50 more, it is simply not enough. The last thing the people of Athy expected from the IDA was that it would intervene to prevent or delay jobs from coming on-stream in the town and area — hence my call on the Tánaiste and Minister for Enterprise, Trade and Employment, DeputyHarney, to intervene.

The Tánaiste has shown herself to be a good friend to Athy and south Kildare. She has visited the area often and has resourced and supported the Athy investment and development forum, and the very successful FÁS training centre at Woodstock, which she opened in 2002. The indicators for Athy are good. In February 2003, the Minister for Finance, Deputy McCreevy, himself a proven friend of Athy, officially launched the town's Gateway industrial park on the Dublin road, and he returned in February of this year to turn the sod for Athy's new community enterprise centre. The centre, which will shortly be complete, consists of ten offices and workshop-type units, suitable for new and emerging business. It has been funded by Enterprise Ireland and the local community.

In recent years, local business, community and political leaders have worked hard to build up the morale of a town damaged by decades of recession and neglect. Athy is increasingly being seen as an ideal location in which to live, work and do business. New housing estates are being built around the town and the population is increasing. As decentralisation beckons, no State agency has a right to discourage or impede the creation of local job opportunities, least of all IDA Ireland.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. M. Ahern)

I thank the Deputy for having this matter raised on the Adjournment. He will be aware that, under the Industrial Development Acts, the Tánaiste and Minister for Enterprise, Trade and Employment is precluded from directly involving herself in operational issues undertaken by IDA Ireland. Notwithstanding the above, inquiries have been made with the IDA on this matter. Unfortunately, I am prevented from entering into detail on the matter as I do not wish to prejudice the appeal process, which the Deputy will appreciate.

However, I understand the issue revolves around access to roads and services which are under IDA Ireland ownership, and the costs associated with this access. The granting of any such access requires that IDA Ireland follow correct disposal procedures as laid down by the agency. It also needs to take place in the context of the need to ensure that the State receives appropriate value for any such disposal and in line with the requirement to ensure probity in all such financial transactions.

I understand that IDA Ireland and Athy Town Council have been in discussion on the issue of taking charge of roads and services in the Athy area but that this has not reached a final conclusion. In an effort to progress the matter, I am informed by IDA Ireland that it is prepared to discuss the matter further with Athy Town Council and the owner of the land with a view to finding a solution which would allow IDA to withdraw its appeal to An Bord Pleanála.

Social Economy Programme.

Mr. Deenihan

The social economy programme has been described as "that part of the economy which operates between the market economy (private sector) and the non-market economy (public sector)". It has also become known as the "new" social economy, "the third sector" or "third system". The programme offers potential to communities in delivering services that are not met by the private sector and are not provided by the public sector.

The social economy programme operates where the market has failed to respond to the demands of the general public both for the provision of services and for employment needs. It is an effective way to respond to specific local needs and to involve those otherwise excluded from mainstream economic activity in the provision of these services. This is only one aspect of the value of the social economy programme.

The programme can be seen as a community response to exclusion and unemployment in the form of initiatives which combine social and economic objectives that are geared towards sustainability and which have the capacity to make a significant contribution to improving the quality of life. This form of organisation has existed throughout human history and is based on the principles of collective action participation, autonomy and local self help. It is as much about social objectives as economic ones. In fact the achievement of social objectives is a means of achieving economic ones. Developing the social economy programme requires a holistic approach to social and economic objectives and can be part of a joint community development and enterprise programme.

The social economy programme was a three year programme to allow companies to get up and running. However, three years was never going to be enough to allow companies to make a profit and become fully self-sustainable. Many are well on their way to becoming an economic business in their own right but they need more time to achieve these targets. Owing to an arbitrary and totally unnecessary decision by FÁS, the funding support which these companies have is being withdrawn without any alternative process being put in place to help them survive the transition. The impossible demands placed on companies to qualify for social economy status have meant that it has been difficult for them to show the type of short-term profits which FÁS seems to be demanding. What company, after three years, can be expected to show high profit levels, particularly companies which were set up in the first place to meet needs in areas where no private enterprise would operate because of the economic difficulties of those areas?

Companies now find themselves in circumstances where they are faced with closure or a radical cut back in services which, as always, will hit the least well off who avail of those services. A decision needs to be made now to reverse the decision made by FÁS in the last few weeks and to continue to provide for a further two year period, perhaps with 75% funding. Most of the employees in these companies are from disadvantaged backgrounds and many were long-term unemployed before achieving a position with these companies.

Part of the social economy ethos is to train and encourage employees back into the work environment, so they have real job prospects. Much time, money and effort has been invested in achieving this aim. However, it will all be wasted should these companies be forced to close, as employees will end up back on the live register, especially in areas where jobs are scarce. The cost to the Exchequer of supporting employment in these social economy companies is cost effective when compared with the cost of paying for these individuals on the live register.

There are ten social companies in north Kerry covering activities such as IT training and access for the disadvantaged, provided by Kerry IT Network North Kerry Together; the rural transport network, provided by the Kerry Flyer; local enterprise companies, such as Ballyheigue Enterprise group and Cumann Energy Action; the museum operated by Tarbert Bridewell; cultural heritage services provided by Seanchai; services for the elderly, provided by the Society of St. Vincent de Paul, Castleisland, and Cumann Iosaf, Tralee; and community gyms, operated by Listowel Community Centre, St. Brendan's Community Centre in Ardfert and Ballyheigue Community Centre. These companies provide vital services in their local areas in a cost effective manner. They employ a total of 83 people and cost approximately €1,232,000 from Government funds per annum. They have been meeting essential needs such as rural access, IT access and training and so forth.

According to the recent live register figures, unemployment in the north Kerry area has increased by 3%. The loss of 83 social economy jobs will have a further devastating effect on the local economy. Areas such as north Kerry need direct Government support and intervention. Since this Government took office in 1997, north Kerry has experienced closure after closure of our traditional enterprises.

An Ceann Comhairle

I ask the Deputy to conclude. In fairness to the staff of the House, Members should not go beyond the time allocated.

Mr. Deenihan

I appeal to the Minister to provide the necessary financial resources to FÁS to enable it to continue with one of the best run and most successful employment schemes ever introduced in this country.

Mr. M. Ahern

The social economy can broadly be defined as "that part of the economy, between the private and public sectors, which engages in economic activity in order to meet social objectives". It consists, therefore, of enterprises which provide social services, whether they are publicly or privately funded, or a mix of both.

The FÁS social economy programme arose out of the report and recommendations of the social economy working group established under the Partnership 2000 agreement. It was formally launched by the Tánaiste in September 2000. The programme aims to support the development of social economy enterprises to meet social objectives and, in so doing, create sustainable jobs. It is particularly targeted at providing sustainable employment for disadvantaged communities, "communities of interest", for example, Travellers and disabled persons, and long-term unemployed persons.

Social economy enterprises may be involved in community business, ultimately financed from trading income alone; deficient demand social enterprises, where the demand for particular goods and services within a community is not matched by resources to pay for them, due to disadvantage or low density of population; enterprises based on public sector contracts, which deal with the potential for sub-contracting public expenditure in disadvantaged areas and communities to local social economy enterprises.

No decision has been made to scrap the social economy programme with effect from next October. The programme is funded by FÁS from its employment programme budget. A total allocation of €351 million is being provided in 2004 to support up to 25,000 places across the three FÁS employment schemes — community employment, job initiative, and the social economy programme, SEP. Of this, €40 million is earmarked for the social economy programme. This compares with funding of €6.6 million in 2001, €20.5 million in 2002 and €36 million in 2003. There are currently 329 social economy enterprises in operation, employing 2,304 grant supported employees.

The demands for assistance under this programme far exceed the budget available. FÁS is scheduling the support to approved projects to ensure as equitable a distribution of funds as possible. In the circumstances, it is not possible to satisfy all demands and some enterprises will be disappointed. FÁS will endeavour to support and encourage SEP to be self-sustaining and will continue to honour its commitments made to enterprises under the SEP first round of funding, where appropriate. No new enterprises are being accepted for funding under the programme.

FÁS will review each project with the managing agents and, in particular, will evaluate the sustainability of the projects after the third year, taking account of both economic and social objectives. Where projects are considered not sustainable the possibility of supporting essential social services through community employment will be considered. In addition, special attention will be paid to needs of the participants on these projects.

A review of the social economy programme was undertaken by WRC Social and Economic Consultants. The report presents three options with respect to the future direction of the programme. First is the revitalisation option, which would reconfigure the SEP as it is currently designed and operated. This would involve a break with the established policy of providing funding to enterprises in the social economy through active labour market programmes. Second is the reform option, which means acknowledging the main limitations of the SEP and attempting to improve its continued operation based on the recommendations of stakeholder groups. The third option is a transition option, which means acknowledging the main limitations of the SEP and attempting to improve its continued operation based on the recommendations of stakeholder groups.

The report is currently being considered by FÁS and the Department, taking account of the views of the social economy programme monitoring committee, and a decision on the future direction of the programme will be made in due course. It is intended in the context of Sustaining Progress formally to seek the views of the social partners on the social economy and other active labour market programmes before deciding on any further adjustments to these schemes.

Social and Affordable Housing.

Mr. S. Ryan

I thank the Chair for affording me the opportunity to raise this issue. I wonder whether anyone can remember when one could buy a house in the Dublin area for less than €100,000. The last time that was possible was in 1996, just before Fianna Fáil and the Progressive Democrats took office. Then the average house price in Dublin was €97,058. Today it is more than €300,000. Since then the price of houses in Dublin has increased by nine times the rate of inflation, five times the increase in average earnings, and four times the increase in building costs. In the same period the number of applicants on council housing lists has more than doubled to nearly 55,000. This is a scandalous situation and an indictment of Government policy in this area.

The vast majority of people still aspire to owning their own homes. In recent year accelerating house prices have created a major difficulty of affordability. House purchase is now simply beyond the reach of an increasing number of people. Even those on relatively high incomes or couples with two average incomes are unable to bridge the gap between the potential loan and the house price. As outlined, house prices are completely out of line with increases in the CPI, house building costs or average earnings.

The purpose of this debate is to highlight the frustration and anger of thousands of low and middle income earners who are unable to secure a loan or an affordable house from local authorities as, on the one hand, they are in excess of income limits and, on the other, they are not earning sufficient to secure the necessary loan from a building society or private lending institution. This situation must be addressed by the Minister.

The maximum loan which may currently be advanced by a local authority for the acquisition or construction of a house is €130,000. The income eligibility for such a loan is €32,000 for a single income household and €80,000 for a two-income household. The loan and limits have not been revised or increased since January 2002, resulting in thousands of people throughout the country being made ineligible or removed from the home ownership market. I have a file of people who were on an affordable housing list in Fingal County Council and were subsequently removed as they had breached the income limits, in most cases on the basis of increases secured from national wage agreements.

I urge the Minister to acknowledge the problem and deal with it immediately by increasing loans from €130,000 to €170,000 and income limits from €32,000 to €40,000 and from €80,000 to €100,000. In determining the eligibility of a person, the procedure should be changed to take into account the annual net income, that is, the gross annual income net of income tax and PRSI. This would not set a precedent because it is in line with eligibility in accordance with Part 5 of the Planning and Development Act 2000. New rates should be annually index-linked. Part 5 of the Planning and Development Act 2000 in respect of affordable houses must be implemented in full. If this requires taking on the private lending institutions in terms of a so-called claw-back that should be done.

I ask the Minister, who has a good ear for the situation on the ground, to take on board some of the concerns and respond positively sooner rather than later.

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern)

I thank Deputy Seán Ryan for raising this important issue. I accept that access to affordable accommodation is an essential element of economic and social policy and recognise the importance of setting appropriate income eligibility and loan limits for the shared ownership scheme and the 1999 affordable housing scheme to ensure that as many of our younger households as possible can realise their goal of owning their own house. I have requested my Department to carry out a review of the terms of the income and loan limits currently applying. This review is currently being finalised and I will be in a position to announce changes to the limits arising out of this very shortly.

The general principle of housing policy is that those who can afford to do so should provide for their housing needs either through home ownership or private rented accommodation and that those who are unable to provide for their own housing needs should have access to social housing. The official number on housing waiting lists is 48,000, not 55,000. I realise the situation is bad, but there is no point in exaggerating.

Improvements in disposable income, through income increases and tax reductions, combined with historically low interest rates, have improved affordability of housing in recent times. It is affordability that counts, not price. I am not saying price is unimportant. However, one must take account of rising incomes, lower taxes and historically low interest rates. Homes are much more affordable than their price might indicate. Improved economic conditions have facilitated many in achieving home ownership. The local authority shared ownership scheme and the 1999 affordable housing scheme benefited more than 2,500 households in 2003 and much progress is being made.

The changes arising from the review of the income eligibility and loan limits will improve affordability for potential applicants under both schemes. The Department is examining the issue and before the end of the month, if not sooner, the new figures will be announced. They will not be quite as high as the Deputy suggests. We have in mind an increase of roughly 10% in the income limits and approximately 20% in the loan limits. A few minor points still need to be ironed out in the review. I hope to make an announcement very soon. It is hoped that the increases will help many people to achieve the goal of owning their own homes.

I note the Deputy's comment that some people, having got approval, are told they must be reassessed only to find that they have moved outside the eligibility limits, perhaps because they have secured an increase under a national wage agreement. I am considering whether steps could be taken to address that eventuality. I hope to have the review finalised very shortly and the figures announced.

The Dáil adjourned at 10.50 p.m. until 10.30 a.m. on Wednesday, 7 July 2004.