Dáil Éireann díospóireacht -
Thursday, 16 Feb 2012

Vol. 756 No. 1

Topical Issue Debate

Financial Services Regulation

Deputy Dara Calleary

Yesterday the Financial Services Ombudsman's report for 2011 was published. It highlighted the continuing problems we have by shining a light on the way the financial industry often treats its customers. Some 7,300 complaints were made to the Financial Services Ombudsman against financial institutions in 2011 relating to three broad sectors: banking, insurance and investments. Almost €2.25 million was repaid or awarded in compensation to customers of financial institutions last year on the direction of the Financial Services Ombudsman.

In 2009, the former holder of the office, Mr. Joe Meade, signalled his intention to write to the Minister for Finance to request that the Financial Services Ombudsman be given legislative authority to name particular institutions when it is in the public interest. I pay tribute to the work of Mr. Joe Meade as the Financial Services Ombudsman. He was a champion of consumer rights and his relaxed style did much to demystify his office and show people there was a redress mechanism. His successor, Bill Prasifka, has continued that trend and repeated the call, during an interview on "Morning Ireland" this morning, for the power to name these institutions.

We need to ensure the public has access to accurate information about how financial service providers are treating customers and how they behave when their shortcomings are pointed out. It is accepted that there is little, if any, public confidence in the Irish financial system at the moment. Deputies and Senators get daily complaints about the manner in which financial institutions are treating their customers, particularly as they pursue loans and debts. While I recognise that a code of conduct exists, this is more often breached than adhered to. Many people feel intimidated and unsure about how to report a breach of that code or how to engage with their bank or financial institution. The way to resolve this is through greater transparency about the performance of individual institutions.

The common themes in respect of the complaints are the sale of commission-driven financial products without regard to their suitability and the treatment of elderly customers, many of whom were sold long-term or high-risk bonds that were completely unsuited to their needs. I wish to highlight the case of a couple in their 70s who had deposited their life savings of €345,000 in one of our banks. In 2005 they were encouraged to put their money in a managed fund to get a better return. In 2008 they were again approached by the bank which advised them of a significant drop in the value of the fund. It was only at this point that they were fully informed about how the investment was managed, in particular that 70% of the initial €345,000 was based on the performance of the stock market. To make matters worse, if they withdrew their money at that stage, they would be hit with a €9,000 penalty. Thankfully the Financial Services Ombudsman found in their favour. However, we cannot name the bank involved under the present regulations.

In July 2011, Mr. Prasifka initiated a round of public consultation on the publication of information on the complaints record of financial service providers. He pointed out that the publication of such information would require an amendment to the legislation. My colleague, Deputy Michael McGrath, published a straightforward Bill in December that would extend the necessary powers to the Financial Services Ombudsman to bring this information into the public domain. For confidence to return to the system, we need to get such information into the public domain. We have submitted the Bill for consideration in the lottery for the Dáil sitting on 2 March. I hope it will be selected for debate and that the Minister will consider supporting it.

Minister for Finance (Deputy Michael Noonan)

I thank the Deputy for raising this important issue. The issue the House is debating is whether a financial service provider which has been found by the Financial Services Ombudsman to have acted in an unfair manner should be named. This issue is the subject of discussions between the Financial Services Ombudsman and the Department of Finance.

Before I talk about these discussions I would like to talk about the important role played by the Financial Services Ombudsman. The Irish Financial Services Ombudsman's Bureau came into being in April 2005 and a measure of its great success has been its growing profile among consumers and industry. The role of the Financial Services Ombudsman is central in underpinning consumer confidence in the effectiveness of the regulatory regime, complementing the role of the Central Bank in safeguarding consumer interests. The Financial Services Ombudsman exercises an independent statutory function, operating in a strictly balanced and transparent fashion to investigate cases where individuals may have suffered as a result of, for example, misconduct by a financial institution or a failure to play fair with customers. The Financial Services Ombudsman is responsible for ensuring that unresolved complaints from customers of financial service providers are investigated, mediated and adjudicated upon. The importance of having an out-of-court adjudication complaints system for consumers who are not satisfied with the decisions of financial service providers cannot be overemphasised. Deputies should consider how difficult and expensive it would have been for the large number of consumers who have used the services of the Financial Services Ombudsman's Bureau not to have had an effective out-of-court dispute resolution mechanism to deal with their complaints. The cost of litigation might have served to dissuade many from pursuing their grievances. The costs for financial services bodies in defending complaints through the court system would also add significantly to operation costs.

I now turn to the discussions that are taking place between the Financial Services Ombudsman and my Department about the issue that is before the House. In July 2009, the then Financial Services Ombudsman wrote to the then Minister for Finance. In his letter he referred to comments made by various media personnel and other commentators at that time about the extent to which published decisions of the Financial Services Ombudsman should name the financial services provider. He went on to request he be given the option, if he considered it to be in the public interest, to name an institution that had been subject to one of his decisions. He outlined two reservations he had about naming institutions against which he had made findings. His first was that complainants may be less inclined to bring a complaint if they felt they might be named. His second was that institutions might take a more defensive line and might appeal findings more to the courts if they felt they were to be named anyway. However, despite these reservations, he said that he was requesting the option to name publicly an institution that had acted wrongly. The reason he gave for this was that it could be a preventative measure and that the threat of being named could act to ensure that malfeasance, when discovered, would be easily rectified and be less likely to recur.

The former Financial Services Ombudsman also suggested certain safeguards that should be included in any legislation that would give him this power. The first was that he be given sole discretion as to whether an institution should be named and that he would not be required to provide names in every case. The second was that the complainants would not be named. The third was that he would have statutory privilege covering the naming of institutions. He also said that criteria would have to be established to ensure the naming was done in a fair manner.

Following receipt of the letter from the Financial Services Ombudsman, my Department sought legal advice to help inform the deliberations to formulate a clear policy position. As Members will appreciate, this is a complex issue that requires detailed examination prior to bringing forward legislation. For example the criteria for publishing would have to be identified in the legislation. Any amendment to the current legislation must be validated, justified and applied in an objective and reasonable manner to all financial service providers.

My Department requested that the Financial Services Ombudsman consult with industry to better inform the debate. In 2011 the Financial Services Ombudsman invited submissions from all interested parties on the issue of publication of information on the complaints record of financial service providers. While inviting submissions, the Financial Services Ombudsman also set out its preliminary views on the form that such a disclosure could take. The Financial Services Ombudsman received a total of nine submissions, including one from an individual and eight from individual financial service providers and industry stakeholder representative groups. All submissions have been published on the Financial Services Ombudsman website.

Acting Chairman (Deputy Joanna Tuffy)

Minister, you are over time. I will take a supplementary question and return to you afterwards.

Deputy Dara Calleary

I welcome the tone of the response so far. If the Minister wishes to conclude he should carry on.

Deputy Michael Noonan

On 5 January 2012 the Financial Services Ombudsman wrote to my Department. He referred to several of the submissions in which concern was expressed about how information on the complaints record of financial service providers might be presented. Assurances were sought that the information would be presented in a manner that was verifiable, robust, properly contextualised and not misleading. In addition, some submissions expressed a reservation about identifying individual financial service providers in case summaries.

In the Financial Services Ombudsman's biannual reviews, information on findings is given in two forms. First, information is aggregated into three general categories: investment, banking and insurance. Second, within each general category the information is broken down by product type. All information is aggregated across all providers so that no individual provider is identified. The information provided under each category is similar, that is, total number of complaints, complaints upheld, complaints upheld in part, complaints not upheld and total amount of compensation awarded. The annual report provides case summaries on an anonymous basis and details from the findings are redacted so that neither the complainant nor the provider can be identified.

The Financial Services Ombudsman is now proposing that the biannual review could provide a further breakdown of the information provided by the financial service provider. Accordingly, for each financial service provider information would be provided on the total number of complaints, the number of complaints upheld, the number of complaints upheld in part, the number of complaints not upheld and the total amount of compensation awarded. To give an accurate picture of the complaints record of each financial service provider, information about the relative market share of the provider would also be provided. Wherever possible, this would be done using information already in the public domain especially as referenced in other frequent regulatory reporting. For example, for insurance products the relevant metric would be the number of policies in force or the number of people covered by those policies. For banking products the relevant metric might be number of accounts or number of particular products in force. The Financial Services Ombudsman also stated that he would fully engage with the industry to develop the most appropriate manner of presenting market share information for each relevant product and that case summaries identifying the financial service provider should only be presented where there was a compelling public interest to do so and this would be specifically provided for in legislation. He went on to state that such a compelling public interest would include the need to inform potential customers that certain financial products may carry risks that customers would otherwise be unaware of in the absence of such a disclosure.

The Financial Services Ombudsman also suggested that any legislative regime would incorporate several elements. It should set out a requirement to publish information on the complaints record of financial service providers on a regular basis, that is, every six months. It should provide the Financial Services Ombudsman with the flexibility with regard to the format of the presentation of the information. I wish to inform the Deputy that I am currently considering the Financial Services Ombudsman's proposals on the naming issue. Once I have clarified the legal issues involved I will bring the appropriate proposals to Government.

Social Welfare Code

Deputy Willie Penrose

I hope there is some leniency with my time. I thank the Ceann Comhairle for selecting this important issue for debate in the Dáil. We are all aware of the importance of having a safety net in place in the social welfare system for when one falls into personal difficulties such as illness or where one loses one's job unexpectedly. It is important that people who find themselves in these positions have seamless access to the welfare system and that they receive due payments in accordance with their contribution rates as laid down in law.

Like many colleagues in the House, during the course of the recent general election campaign I encountered hundreds of self-employed people throughout my constituency of Longford-Westmeath who had become unemployed unexpectedly. This occurred due to the downturn, due to illness, for other reasons or due to a closure of the business. Such people are liable for PRSI payments under the class S rate of 4% which entitles them to access long-term benefits such as the State pension contributory or the widow's, widower's or surviving civil partner's pension contributory. It can be gleaned from the foregoing that this does not qualify them for jobseeker's benefit irrespective of how long they have been making contributions. These people are compelled to recourse to jobseeker's allowance which, as we are aware, is means-tested.

For many formerly self-employed people this turns out to be their first encounter with the social welfare system. This has turned into an emotive, tortuous and complex process in so far as the assessment must reflect the income that the self-employed person might expect to get from his or her business in the following 12 months or so. Generally, this is posited upon what he or she has earned during the previous 12 months. A minute examination of the previous year's activities and income arising is then gone through. Most people do not have one euro left at that stage. It is rather like looking for last year's snow in the middle of spring. It is an exhaustive process that takes a long time and it taxes everyone's patience. These people are left in limbo without any income to pay for the essentials of living, such as keeping food on the table or keeping a roof over their heads.

The fall-back advice is to go to the community welfare officer. However, this is not a straightforward process. One's history must be reviewed and an assessment must be carried out and this is part of the vicious cycle. In the meantime the self-employed applicant is not even a statistic on the unemployment register. By virtue of this consequence alone, such people do not qualify for participation in the various schemes or opportunities that might arise therefrom. They are left in no man's land. They feel bruised and isolated and deeply irritated and understandably so.

As a result of these situations I have encountered in recent years I specifically requested that a commitment should be included in the programme for Government to examine the feasibility of providing social insurance cover for self-employed persons. I compliment the Minister on establishing the advisory group on tax and social welfare to progress this issue and to establish whether cover is technically feasible and financially sustainable. I realise the Department must go through this process.

We should not forget that many of these people who were self-employed also provided valuable employment for others. Many were sole traders or partners and found themselves to be victims in so far as money due from the main contractor or sub-contractor which may have gone out of business did not materialise or else they were subject to part payment, ultimately leading to the collapse of the self-employed person's business. This is why they find themselves going to the Department.

We must confront this issue and address it in a positive and constructive way. We must address the plight of the self-employed. From my discussions with self-employed persons I believe that given the opportunity they would be willing to contribute to a special rate of PRSI contribution. I accept that this would likely be significant but it would enable them upon cessation of employment by virtue of a downturn or other circumstance to qualify for benefits immediately and have access to the full range of social welfare insurance benefits that arise from making contributions at a given level or class. This may not mean such a person would be entitled to the full range of social welfare benefits but it should correspond to the appropriate class. As an accountant, the Minister will be acutely aware of this and will be better able to understand it than most.

I do not believe this would open the floodgates although I understand the Minister will have some concerns in that regard. Many self-employed persons must register as an employer. Self-employed people never receive any recognition for their role as tax collectors who furnish payments to the Exchequer on a monthly basis and must employ people to do so.

It is time the issue of the exclusion of self-employed people from the social welfare system was faced and addressed in a positive way. That is the least these people deserve. I compliment the Minister on making a good start.

Minister for Social Protection (Deputy Joan Burton)

I thank Deputy Penrose for raising this important issue which is critical for the people, families and communities affected by the loss of employment by so many self-employed people. Not only did these people employ themselves and their families, but they employed many others, particularly in the construction area and allied sectors.

Self-employed persons are liable for PRSI at the Class S rate of 4%, which entitles them to access long-term benefits such as the State pension, contributory, and widow's, widower's or surviving civil partner's pension, contributory. Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. For employees earning less than €356 per week, the rate of employee's PRSI is 4.25%

Any changes to the PRSI system to extend the full range of social insurance benefits, including jobseeker's benefit, to self-employed persons would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable.

I established the advisory group on tax and social welfare last year to meet the commitment made in the programme for Government. The advisory group will, inter alia, examine and report on issues involved in providing social insurance cover for self-employed persons in order to establish whether such cover is technically feasible and financially sustainable. In addition, the actuarial review of the social insurance fund, which is due to be completed in mid-2012, will examine this matter. Obviously, since the crash, the social insurance fund has gone into significant deficit and that is part of our problem and we must find a way to get the social insurance fund to grow so we can meet all the requirements on the fund.

Self-employed workers may establish eligibility to assistance-based payments such as jobseeker's allowance. They can apply for the means-tested jobseeker's allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In general, their means will take account of the level of earnings in the past 12 months in determining their expected income for the following year and, in the current climate, account is taken of the downward trend in the economy. As in the case of a non-self-employed unemployed claimant of jobseeker's allowance, the means of the person's husband, wife, civil partner or cohabitant will be taken into account in deciding on entitlement to a payment.

I share the Deputy's memory of the snow last year and of the distress of families that found themselves in the unfortunate position described so eloquently by Deputy Penrose.

Deputy Willie Penrose

Even in trying to bring equality to the system, is it not the case that all current earnings from self-employment are taken into account and there are no disregards as there are in similar cases where people are not self-employed? Also, earnings are assessed as gross income less the work related expenses.

Notwithstanding the Minister's comment on the actuarial review and the significant deficit, we should not resile from confronting this problem. The mark of this Government will be to do something new. This is a reforming Minister and she can leave her mark on the social welfare system by dealing with this issue. She should not resile from the issue and if it is necessary for the self-employed to pay at a rate of 20%, so be it. At least then when they have to go to the social welfare office in four year's time - hopefully the situation will have changed and that will not be necessary - they will be able to get an immediate payment. We must put food on the table today and there is no use promising utopia tomorrow. We must look after the people. Self-employed people have basically been written out of the script, but I do not intend to allow that situation continue. I have had a taste of that situation myself, so I know the two sides of the coin, as does the Minister.

I know the review group is to come back with a report, but the Minister must not allow that report gather dust nor let reports gathering dust become the hallmark of the Government. She must act on the report and bring it to an Oireachtas committee where we can debate it. She will find people from the self-employed sector more than willing to participate in that debate and to make positive progress.

Deputy Joan Burton

I appreciate the Deputy's comments and views. Our social insurance must change to accommodate the fact that many more people will, at some point in their working lives, be self-employed, be self-employed contractors or set up a small family company, for example, in the construction industry. In some cases, employers have structured employment so people who would formerly have been deemed employees, are contractors and self-employed. We cannot call our system a universal social insurance system unless we take account of these patterns of employment. Many of the self-employed people mentioned by Deputy Penrose are people who worked in construction, whether plumbers, carpenters or something else. Traditionally, these people would have been employed as employees, but the manner in which the construction industry has developed over time has meant that many of these people became self-employed subbies. Often they were left waiting for payment and this, in turn, contributed to their distress.

I am conscious that currently, in law, even if people have the wherewithal and wish to make a contribution, they are unable to do so and many self-employed people have made that point to me personally. Self-employment covers a wide range of jobs and professions. Barristers are self-employed and we often do not think of some of the wide range of people in various jobs and professions as self-employed. I know from speaking to many of these people, not only those in the construction sector, that many of them are interested in being allowed to make a contribution so they will have some cushion of safety in the event their business or employment goes south.

Employment Support Services

Deputy Alan Farrell

I want to provide the context for this issue. In 2010 some 20 courses were offered to residents of Balbriggan and the surrounding areas in the FÁS facility. In 2011 the number of courses was reduced to 12 and as of last month there is none. In terms of the number of people unemployed in the area, in 2010 that figure was 3,000, in 2011 it was 4,000 and now in 2012, it is almost 5,000, of which some 25% are under 25 years of age. In the most recent and previous census, Balbriggan was the second fastest growing urban centre in the State, just behind Dublin 15. However, it is now in the unfortunate position of having no training courses available for those seeking employment.

I accept what FÁS has said with regard to the effectiveness of the courses in generating employment for participants. At the same time, it is incumbent on the State to do what it can to upskill individuals who, for various reasons but through no fault of their own, find themselves unemployed. Balbriggan is a town of 15,000 people and for that number of its population to be unemployed is shocking. A number of arguments have been made for relocating the courses and for sending Balbriggan residents 30 km to the Baldoyle facility. However, the travel allowance provided to these social welfare recipients is only €20. A single ticket from Balbriggan to Baldoyle is €4.70 and it amounts to €33 per week there and back for attendees. That may not seem like much money to some but it is a significant amount for social welfare recipients attempting to upskill in order to more readily find employment.

What is the rationale behind stopping courses in the Balbriggan facility and will the Minister of State reconsider the decision to discontinue courses there, given the growth in the town and obvious difficulties with employment in the area? A large number of potential students are under 25 and some may not have third level qualifications and use FÁS or SOLAS as an opportunity to upskill. I am interested in the Minister of State's comments.

Minister of State at the Department of Education and Skills (Deputy Ciarán Cannon)

I thank Deputy Farrell for giving me the opportunity to clarify this very important issue. The organisation of FÁS training is an operational matter for that body but I am pleased to let the Deputy know that I have been informed that officials in FÁS training services have not made a decision to discontinue the provision of training courses in the Balbriggan area.

The FÁS training centre in Baldoyle has responsibility for the operation and administration of contracted training in north Dublin, which includes the Balbriggan area, and in 2011 the training centre conducted a performance review of its training portfolio and provision over the previous two years. This review, in conjunction with the FÁS training strategy and corporate objectives, determined the initial 2012 portfolio and the allocation of training provision within north Dublin, including the Balbriggan area. As I am sure the Deputy can appreciate, in light of the prevailing economic and financial conditions, it is imperative that training courses achieve critical performance measurements and value for money to ensure continuing budget allocation.

The FÁS analysis of the training courses delivered in the Balbriggan area highlighted that in some cases the required training outcomes, particularly placement into employment, were not achieved, and consequently the initial 2012 allocation of training provision in the Balbriggan area has been adjusted. The FÁS training centre in Baldoyle is currently in the process of reviewing the allocation of contracted training provision for 2012 and as part of this process the centre will review training provision within Balbriggan and other areas with a view to identifying training requirements that are in line with labour market demand and which will produce quality outcomes and value for money. The Deputy may already know that in addition to contracted training courses, FÁS currently funds local training initiative projects and the Balbriggan enterprise development group jobs club.

Deputy Alan Farrell

I thank the Minister of State for his response. I take issue with FÁS making a decision to reduce the training facilities by 100% upon completing an investigation into the effectiveness of the courses it provides. Given that the assessment was done over the past two years, when we lost the most jobs in this State, I would have thought some consideration would be given to that fact. I am disappointed, although there is a chink of light in the indication that FÁS will continuously review training provision within Balbriggan and other areas. As I noted at the start, in 2010 there were 20 courses, and that was reduced by almost 50% to 12 courses in 2011. Now there is none and the unemployment rate has increased substantially in the area.

I accept the Minister of State's indication that it is the responsibility of FÁS to make such decisions but I plead with him to have a conversation with officials in that body and convey to them my sentiments and those of a number of residents in the area who have been in touch with me. There have been two headlines in local media about this issue and one of the comments, to which I have already alluded, is that Balbriggan residents can access FÁS services in Baldoyle directly by mainline rail within the travel allowance available. That is true but the allowance is just over half of what would be required in order to attend the facility. Will the Minister of State convey these facts to FÁS with a view to reviewing the decision?

Deputy Ciarán Cannon

I will undertake to convey the Deputy's sentiments to FÁS as it carries out the review of training provision in north Dublin in general. As I indicated, there has been no decision by FÁS to discontinue all training courses in the Balbriggan area. The review of the FÁS contracted training provision for 2012 within Balbriggan and other areas will highlight the relevant training requirements that will provide timely and effective outcomes for participants and deliver value for money for FÁS training services.

We must acknowledge that there have been past difficulties with the quality of courses delivered by FÁS and the outcomes for participants. In particular, there have been difficulties with placement rates at the end of these courses. We must ask ourselves, not alone for the north Dublin case but for the entire country, if we intend to continue training provision for the sake of it or if we will carry out an in-depth and forensic analysis of the kind of training being provided. Will we assess whether the training is appropriate to the needs of the learner or client, as well as the needs of enterprise in each specific area? FÁS is undertaking to answer these questions to ensure that the training being provided is appropriate to the needs of the learner and enterprise in general. I am confident that when the review is complete, there will be training provision in Balbriggan and nobody in the area who seeks to have a high quality and appropriate level of training will be in any way disadvantaged.

Water and Sewerage Schemes

Deputy Michael P. Kitt

I will not have to elaborate too much on this issue as the Minister of State and I share the constituency of Galway East. He will appreciate that there was a unique decision by the members of Galway County Council in 2006 or 2007 to provide funds solely from the council for the Kiltormer sewerage scheme. This decision stemmed from the frustration of councillors, who found it difficult to get approval for a sewerage scheme in a small village like Kiltormer. There were funds available from development charges and the building boom in 2006 and 2007 so the council was able to make up to €1.1 million available for a scheme like this. I understand there were two small villages in County Galway earmarked for funding from the development charges.

There were efforts made by me, the councillors and, I am sure, the Minister of State to try to get group sewerage schemes set up with funding under the CLÁR programme but they all seemed to fail. In the case of Kiltormer, consultants were appointed, a site was identified as a treatment plant and the costing in 2006 and 2007 was approximately €1.1 million. I do not know what the figure would be today and the Minister of State might indicate if it could be less than that. A special fund was allocated from planning and development charges levied by the county council.

There were many reasons given for the delay in approving the scheme, and I would class many of these as excuses. For example, when cryptosporidium appeared in the Galway city water supply, it was given as a reason a small scheme like that in Kiltormer could not go ahead. I do not accept such a reason. There always seemed to be an issue about funding going to bigger cities and towns, and that is true even within County Galway. The needs of industry were often prioritised as well.

This raises the question about a scheme for this small village. The county councillors had agreed to provide the funding. They had won the battle for east Galway within the council. Many villages in that part of the county had been unable to make progress. As the Minister of State knows, Kiltormer used to have a particular problem with its water supply. This was sorted out when the Ballinasloe regional scheme was developed. Now that the water supply issues have been resolved, it is time to secure the funding that was made available five or six years ago. It should be ring-fenced for Kiltormer village. This would be an ideal scheme. If the funding can be provided, it will be possible to make a start on this project. I hope the Minister of State will be able to say whether this is possible.

Deputy Ciarán Cannon

I thank the Deputy for raising this matter . I am responding on behalf of the Minister for the Environment, Community and Local Government. The water services investment programme, which is administered by the Department of the Environment, Community and Local Government, is the principal means by which the strategic objectives of capital investment in water and waste water services are achieved. A rolling three-year programme approach was adopted in 2000 for the development and roll-out of the programme. Funding is also available for smaller public schemes through the rural water programme. Responsibility for the rural water programme is devolved to local authorities. The selection and progression of schemes under the programme, within the allocations and parameters set by the Department, is a matter for the local authority concerned.

I understand that a proposal in respect of a sewerage scheme for Kiltormer was received by the Department of the Environment, Community and Local Government from Galway County Council as part of the development of the 2005-07 water services investment programme. The Kiltormer sewerage scheme was rated 22nd on the list of sewerage schemes that was submitted by the council in response to the Department's request to local authorities in 2003 to produce updated assessments of needs for capital works in their areas and prioritise their proposals on the basis of those assessments. In light of the level of competing demand for the available funding and given the priority afforded to the scheme by the council, it was not possible to include the scheme in the 2005-07 programme. For the same reasons, it was not included in the subsequent programme, which ran between 2007 and 2009.

The current water services investment programme, which covers the period between 2010 and 2012, aims to prioritise projects that target environmental compliance issues and support economic and employment growth. This programme followed the comprehensive review of water services capital investment that was undertaken in 2009 and 2010. All projects included in the previous programme which had not substantially advanced were reviewed to ensure the contracts and schemes that were proceeding were fully aligned with key programme economic and environmental priorities. The focus of the programme is on water conservation; environmental and public health objectives, particularly works that are required to respond to judgments of the European Court of Justice and priorities that were set in the first round of river basin management plans; and economic objectives, including works to support the development of hubs and gateways and employment creation.

A key input to the development of the current programme was the assessment of needs that was prepared by local authorities, including Galway County Council, in response to the Department's request to local authorities in 2009. These proposals were subsequently appraised by the Department. The Kiltormer sewerage scheme was not among the list of projects that were put forward by Galway County Council as part of this assessment. Therefore, it was not included in the programme. While significant resources have been provided over the past decade for water services, the availability of funds and strategic priorities determines the selection of individual projects for advancement. Consequently, it has not been possible to advance proposals in relation to the Kiltormer sewerage scheme.

Deputy Michael P. Kitt

I am a little disappointed with the Minister of State's reply. I am anxious to find out what happened to the €1.1 million in planning and development charges that was allocated from the council's own resources. The Minister of State is responding on behalf of the Minister - I appreciate this is not his Department - so perhaps he does not know. The councillors decided that the village of Kiltormer should get a small sewerage scheme, which it badly needs. I represented the Kiltormer area, which the Minister of State knows as well as I do, at county council level for 17 years, including when this project was first proposed. If I live for another few weeks, I will have been representing the area in the Oireachtas for 37 years. I have been pushing this scheme for a long time.

It is disappointing that the Minister of State has been unable to provide information on where the money went. Did the consultants who were appointed draw up a report? What happened the site that was identified for the treatment plant? There must be some record of what happened the money and the preparations that were made for the scheme. One of the reasons I have been approached on this issue is that people will soon have to pay €5 or €50 to register their septic tanks. People in Kiltormer think that if this scheme had been completed in 2006 or 2007, they would not have to pay €5 or €50 to register their septic tanks. That is a fair comment. No one is objecting to that on those grounds. The point that is being made by those who feel rural Ireland is being discriminated against is that the €5 or €50 charge that is being imposed on everybody with a septic tank will not have to be paid by those whose properties are served by sewerage systems. It has been suggested that people whose septic tanks need to be improved will have to pay up to €1,700.

I do not think the Minister of State has answered many of the questions that are being raised in this regard. I ask him to get back to me. Perhaps he can contact the Department to find out what happened the funding that was made available by councillors in good faith? I refer to receipts from the development charges. If that information is made available, it might be possible to make a start with this scheme.

Deputy Ciarán Cannon

I will do everything I can to advance the provision of a sewage treatment plant in Kiltormer. If Deputy Kitt sends me an e-mail reiterating the points he has made, I will raise them directly with the Minister, Deputy Hogan. It is important to point out that the Minister and the Department give local authorities a large degree of autonomy to assess their own water and waste water needs. The most recent assessment that was conducted by Galway County Council, which fed into the preparation of the 2010-12 water services investment programme, did not include a proposal for a sewerage scheme in Kiltormer. The first port of call for Deputy Kitt and me - and perhaps other Members of the Oireachtas who represent Galway East - might be the local authority to establish why the scheme in Kiltormer was not prioritised. In fact, it was not even included in the most recent list that was submitted by Galway County Council. As the Deputy suggested, I will seek to ascertain where the €1.1 million fund ended up. Perhaps it was invested in other schemes. It might be found in the depths of the coffers of Galway County Council or the Department of the Environment, Community and Local Government. I will work with the Deputy and the other Members of the Oireachtas from east Galway to advance this scheme as quickly as possible.